Create a Smart Succession Plan

I am an executive recruiter. In the next 12 months, I will call your top employee and ask her to consider a new job opportunity. She will answer me in one of two ways. Either she will say, "No, thank you. My company treats me well and is grooming me for my next position." Or she’ll whisper the words I love to hear: "I’ve hit a wall here. I’d be delighted to talk."

Her answer will likely hinge on your succession planning program. Without a good one, your retention rates will suffer—and so will your own ability to advance. What CEO will move you into a new position if you cannot backfill the CIO spot with another strong leader?

Running a succession planning program is not easy. To help you move ahead on this critical effort, I’ve asked CIOs who have created a culture of succession to share what they’ve learned.

1. Embed succession planning in your organization.

When insurer Bristol West Holdings went public, the board of directors listed enterprise succession planning as a top priority. CIO Jack Ondeck did a gap analysis of the skills his direct reports had at the time and those they would require to succeed him. Training was arranged for those who needed it.

Ondeck also kept succession planning in mind when he restructured the IT organization the following year. "Most of my senior staff now have a dotted line to a senior VP who is responsible for a large business area like claims, point of sale or product lifecycle," he says. "Since my directors are now setting priorities for the entire group, they are essentially running their own IT organizations with all of the strategic, leadership and political responsibilities that come along with the role." By creating an organization whose departments are led, essentially, by "junior CIOs," Ondeck created a stronger pool of potential successors.

His only regret: "I wish I did the reorganization earlier. The new reporting structure makes my direct reports much better at the jobs they have now."

2. Manage expectations.

When Purdue Pharma CIO Larry Pickett needs a stronger enterprise focus on an area like security, he pulls a middle manager with that specific expertise into his pool of direct reports for a limited time. Not only does this heighten the company’s awareness of an issue, it also gives the employee an opportunity to work with Pickett and participate in IT leadership meetings. The benefits of this approach are great, but Pickett offers a caution: "Employees need to know up front that they will be transitioning back into their place in the organization," he says. "This can feel like a demotion, so it is critical they understand that while they will no longer report to me, they will now have a broader set of responsibilities and will be better positioned for future growth."

3. Don’t forget the technologists.

When Karin Catton became CIO of manufacturer Johns Manville, she conducted an employee satisfaction survey. She quickly learned her staff felt disconnected from the business and lacked strong leadership. So she created a program in which her vice presidents, directors, senior managers and managers meet with their bosses on a quarterly basis to learn what they need to do to move up.

Catton then went one step further: She developed a program for her independent contributors, who don’t manage people. "Your technologists may not be born managers, but they need a development path as well," she says. "We created a succession path in our architecture group that includes a ’principal’ level. The principals do not have staff, but they are on a technical succession plan and [are] recognized throughout the company as thought leaders." By creating a clear career path, Catton has ensured that if her chief technologists leave the organization, she will not have to go outside to find replacements.

Catton has quantifiable evidence that her succession planning efforts are working: Employee satisfaction ratings rose from one to four.

4. Get HR involved.

Pickett considers leadership development a critical responsibility. So he joined forces with HR to create a formal succession planning program that includes job rotation, training, goal setting, feedback and executive coaching. "We used to spend tens of thousands of dollars to send our high-potential employees to external programs," he says. "Now we have an internal program that is better."

Using succession planning, each of these CIOs created a culture where employees and the company win. For those of you with high retention rates, what lessons can you add?

Martha Heller is managing director of the IT Leadership Practice at ZRG, an executive recruiting firm based in Boston. Reach her at mheller@­zrgroup.com.

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Copyright © 2006 IDG Communications, Inc.

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