Next Generation Next Destination

SAME OLD TUNE: SUCCESSION PLANNING STILL LAGS

Nearly one-third (31 percent) of companies with more than 1,000 employees said they don’t currently have a succession planning program at their organization. This was reported in a new Career Builders survey. 50 percent of senior management (CEO, CFO, Senior VP, etc.) and 52 percent of those in a vice president position said they do not have a successor for their current role.

Responses when asked what is lacking in their current succession planning program:

•     Not enough opportunities for employees to learn beyond their own roles – 39 percent
•     Process isn’t formalized – 38 percent
•     Not enough investment in training and development – 33 percent
•     Not actively involving employees or seeking their input – 31 percent
•     It only focuses on top executives – 29 percent

Managers also reported that workers’ awareness of and input on their own succession planning is important. Forty-nine percent of employers said employees don’t set up career paths with their managers with timelines and milestones.

Still a top HR priority. Still little positive action.

The neglect of career planning is going to bite as the economy comes back to life and people have more options.  High potential personnel will be waving bye-bye for the places that promise an appealing career path at any age.

 

 

LIP SERVICE WON’T RESULT IN A SUCCESSION PLANNING AND TRANSITIONING WINNER

The American Management Association (AMA) surveyed 1,098 senior managers and executives in December 2010, and released the results in late March 2011. 43% said their senior management team is “sporadic in its commitment” to succession planning, 34% said their team is “genuinely committed,” while 14% said their team just “pays lip service” to succession planning. So at least 66% are not “genuinely committed” and working on their succession plans for all positions that are critical to avoid business disruption.

 This is a critical issue for Fortune 500 businesses, where 1 in 5 executives are reaching retirement age with no named successor in sight. It is also critical for professional firms, whose main assets walk out the door every night, and not-for-profits and many other types of institutions as well as small business.

Why is so much succession planning talk just lip service? Why does a process so obviously an asset in avoiding business disruption and client defections so widely resisted?

There’s a lot of denial underlying the widespread inaction. To varying degrees I believe it’s about:

• Individual’s, particularly Baby Boomers now, fear of losing influence, clout with colleagues and clients;
• Fear of change of direction, personalities and policies;
• Reluctance to admit that talent will defect
• Unwillingness to confront mortality

Can you add other reasons?  Please do comment.

One solution is to establish an ongoing process for succession planning and transitioning as an institutional and cultural expectation. That becomes an integral part of the business model and is applicable to everyone. It’s not a personal judgment. It’s a business imperative and a foundation for sustainable success.

Enough of silence and lip service.

Submit your comments here. Thanks!

Phyllis Weiss Haserot     www.pdcounsel.com

 

 

WOMEN AND SUCCESSION PLANNING

How will findings in management consulting firm McKinsey & Co.'s report released April, 4, 2011 affect succession planning?

The report examines barriers to women’s advancement in corporations and concludes that what has kept women from reaching top corporate positions is inadequate career development. The report’s author, Joanna Barsh, who is a McKinsey senior partner, said that companies were not systematically watching women in middle management positions. They were not establishing programs, including coaching and “sponsoring”, that would help them develop and get over the hurdles to their next promotion. Lack of that assistance made the barriers become insurmountable.

Findings were based on a 2011 survey of 2,525 college educated women and men; 1,525 of them were employed in large companies, mostly in management positions. The researchers found that the ambition of women declined sharply between age 45 and 54. About 64% of them expressed a desire to advance professionally compared with 78% of men in that age cohort. That varied significantly from the 23 to 34 years of age range in which 92% of women and 98% of men expressed eagerness to advance. The fault was not with the popular belief that women can’t juggle certain jobs if they have family responsibilities. There is a mindset that must be changed that limits women’s opportunities.

The report said that even a 25% increase in the ranks of middle management women reaching the next level (for example vice president) would significantly change the pipeline. Now only 15% of executive committee positions in Fortune 200 companies are filled by women. And the majority are in staff positions that rarely lead to a CEO role.

One remedy the report suggests is that the performance of top managers be partly evaluated on their ability to groom and promote women. A determined effort to groom more women would increase the number in the succession planning pool and perhaps even increase the amount of succession planning that is actually done, preparing companies with a stronger, better prepared and dedicated bench.

What are your thoughts? How will men react? Please comment?

Phyllis Weiss Haserot   www.pdcounsel.com

 

POLITICAL REINVENTION, AND THEN SUCCESSION PLANNING

I am thrilled to see the success of the young people of Egypt and elsewhere in the Middle East and northern Africa striving for democracy with so far so little violence. If – and it’s a big if – they can bring about positive change in a peaceful way, they will have shown that this Gen Y/Millennials generation has strong convictions and the will to fight for them with less of the lasting harm the protests of the Baby Boomers in the 1960s brought.

Since it takes two sides to come together, perhaps the older generations will learn something too about achieving change. It’s too early to tell, but you know I’m an optimist.

Now the harder part, succession planning and peaceful succession 

Phyllis Weiss Haserot

CFOs OUTLOOK ON RETIREMENT, SUCCESSION PLANNING AND TALENT RETENTION

The 3^rd Quarter CFO Outlook Survey, conducted by Financial Executives International and Baruch College’s Zicklin School of Business, showed optimism on hiring and a desire to delay retirement out of both desire and need. The survey comprised interviews of 249 corporate CFOs electronically from October 6-14 from both public and private companies and from a broad range of industries, revenues and geographic areas, including some off-shore companies. 

The survey also revealed the following priorities coming out of the recession and following the staff reductions experienced by many:

• Retention of remaining talent is a priority for 80 percent of CFOs.
• Training and development ranked as the top tactic for retaining talent (47 percent).
• Compensation followed closely (45 percent).
• Improvements to office atmosphere (35 percent)
• Team building (35 percent), and
• Ensuring opportunities for career advancements (30 percent).

The survey found that many CFOs plan to work beyond the traditional retirement age. Further, they are, in fact, in favor of increasing the retirement age. Forty-one percent anticipate that they will work past age 65 out of desire while 31 percent will do so out of need.  Three percent of them already are working beyond 65. As for an overall increase to the traditional U.S. retirement age, 59 percent favor it, with three years being the average desired increase among those respondents who specified an age.

Succession planning continues to lag despite lip service to its importance. Only 30 percent of responding CFOs currently have a plan in place. While 40 percent of the remaining CFOs believe a plan should be created, another 31 percent do not see the need for one at all.

Full survey results and historical data comparisons are available at www.financialexecutives.org.  The study also is available online at the Financial Executives Research Foundation bookstore and on the Baruch College home page at www.baruch.cuny.edu.

NEW ABA CHAIRS HAVE SUCCESSION PLANNING FOR MEMBER PRACTICES HIGH ON THEIR AGENDAS

From my conversations with future American Bar Association presidents and incoming section chairs at the ABA Annual Meeting, transitioning of practices and continuing careers of senior lawyers (now in midlife) is a big concern and high ranking agenda item. It’s a concern from the standpoint of retaining members and keeping them engaged. It also reflects empathy for their peers who are approaching the time they will be faced with the need to make significant choices. Many members may find themselves panicked and physically and mentally stressed because lack of forethought has led them to a career and personal precipice.

 

Several bar leaders expressed to me a great interest in presenting programs that will nudge and guide

TRANSITIONING: A HOT TOPIC AT THE ABA

Two hot topics among lawyers over 50 at the American Bar Association Annual Meeting in San Francisco August 5-8 were succession planning and anticipating and planning for what comes next for midlifers (defined as age 50-70).  Many Boomers have been putting off planning or even visioning of their next phase. A large percentage (40-60%) want to keep going either as lawyers or in some other capacity after age 65 or 70.

The "Lawyers at Midlife: Planning for and Living the Rest of Your Life" presentation on Sunday morning drew 40 people at 8:30am. The presentation by Mike Long, a former practicing lawyer and for many years now an attorney counselor at the Oregon Attorney Assistance Program in Portland, was a whirlwind tour of the financial, job satisfaction, health/longevity and relationship factors people in midlife should be seriously considering and planning for. The presentation focused on the individual's transition and did not address the institutional (firm or organization) factors of client retention/transitions and knowledge transfer. The audience was engaged, and many admitted they were quite behind in their planning for the inevitable.

Phyllis Weiss Haserot   www.pdcounsel.com

NEW WEB SITE LAUNCH

 I am thrilled to invite you to visit Practice Development Counsel’s newly designed and reoriented web site at  www.pdcounsel.com . With exciting new content added to the existing meaty resources, it is the premier site for solutions to multi-generation challenges in the workplace and how seeing issues through a generational lens can help to achieve better productivity, personnel and client retention, succession planning and business development results.

 

Over the years my practice has evolved with a generational diversity perspective from a primary focus on business development and marketing to incorporate a strong dose of organizational effectiveness. Our aim is to connect those streams on the site. I invite you explore, learn, ask questions and contribute your thoughts. And pass the URL (www.pdcounsel.com ) on to anyone you think it can help with their workplace challenges.

  

I’m very happy with the vibrancy of the site, which reflects my passion for color, lively environments, and provocative commentary. Enormous thanks to web designer and developer Josette Dewey of Sheffield Media Group for her talent, patience and persistence in dealing with such a huge amount of inter-related content to produce a cohesive, attractive, easily navigated site. She is a joy to work with!

 

Phyllis Weiss Haserot    www.pdcounsel.com

SHOULD LACK OF SUCCESSION/TRANSITIONING PLANNING BE KEEPING YOU UP AT NIGHT?

According to the 2010 Survey on CEO Succession Planning, conducted this spring by Heidrick & Struggles and Stanford University’s Rock Center for Corporate Governance, more than half of companies today cannot immediately name a successor to their CEO should the need arise. The survey of more than 140 CEOs and board directors of North American public and private companies reveals that, while 69% of respondents think that a CEO successor needs to be “ready now” to step into the shoes of the departing CEO, only 54% are grooming an executive for this position, and more than half could not name a new permanent CEO if the current chief became incapacitated tomorrow. The study also revealed that only 50% of companies have a written document detailing the skills required for the next CEO, and 65% have not asked internal candidates whether they want the CEO job, or, if offered, whether they would accept. (From a Stanford University School of Business press release - May 16, 2010)

 

If this doesn’t strike you as astounding, it should at least be worrisome. And it is only the tip of the iceberg, because an organization of any size has many significant positions for which succession planning and transitioning are critical to business continuity. Stop a few minutes and list them. Whose extraordinary expertise would be missed if they left for whatever reason? The loss of which people would threaten client retention?  Who are the high potentials that can lead the organization in the future?

 

It’s not just the managing partner, CEO, COO and CFO, President or Founder. In one workshop I led, an organization named the chef as a critical position for which succession planning should be done. Who is the glue? Who knows the firm’s most important “stuff,” can influence the decision-makers, is the insightful and diplomatic spokesperson?

 

At a time when circumstances are changing so fast, succession and transitioning planning might be the most important strategic planning your firm needs.

 

Phyllis Weiss Haserot      www.pdcounsel.com

TRANSITIONING THE CULTURE WITH GEN X TAKING THE LEAD

At Cravath, Swaine & Moore, perhaps the best known and historically conservative "white shoe' law firm, no revolution has been necessary. Increasingly over the last decade, as described in a story  by Gina Cron in the Wall Street Journal (May 28, 2010), at Cravath, Younger Guns Ride Herd, a new group of partners in their 30s and 40s (Gen X) have decided to stop waiting to be called.

They are building new relationships and taking on work that historically was handled by partners in their 50s. Abandoning the deferential culture of forwarding deals up the seniority line, the Gen X partners wanted to work on those deals themselves now and not wait. They have gone after the clients and kept them. Unlike the situation in some firms, the Cravath senior partners don't mind, and they nurture the new environment.

Why? For one thing, their compensation is not affected with the lockstep system. The younger partners' more aggressive style means they get to make a name for themselves at an earlier age - and the older partners continue to thrive with less burden. This is essential to motivate transitioning. The Baby Boomers generally are happy to ease up somewhat and not be aggressive if their compensation is not an issue. They also think that the younger guys should be working with their banker peers.

The senior partners didn't want to do hostile takeovers, but the younger partners were happy to jump into the fray. The results so far indicate it's working out for everyone: the partners, the team and the clients. The firm is getting more marquee deals and the Gen X partners are getting their chance to shine without knocking the Boomers out of the way.

Phyllis Weiss Haserot   www.pdcounsel.com