Next Workshop: 3 and 4 March 2005

The aim of this workshop is to introduce participants to the concept of transformational coaching and to help them develop advanced coaching skills. These skills can be used to achieve extraordinary results both within participants' organisations and in their personal lives.

We strictly limit the size of each workshop to 15 participants so as to ensure a group dynamic that strongly contributes to the development of core coaching competencies.

This Program is Suitable for:

• Senior leaders
• Managers
• Organisational development professionals
• Any person who seeks to drive high performance within their organisation

Program Overview: Putting Transformational Coaching in Context

Coaching is a process that enables individuals, teams and organisations embrace the current dynamic business environment and experience transformational change. It involves interacting with people in a way that shows them how to transform or stretch their vision, values and abilities and produce spectacular results in their lives and in their organisations.

Topics to be Covered in this Two-day Program:

• Organisational Coaching Trends
• Coaching in the Business Context
• Building a Robust Understanding of Transformational Coaching
• Distinguishing between 'Being a Coaching' and "Doing Coaching'
• Advanced Coaching Skills
• Building Strategic Organisational Coaching Capability
• Facilitating Breakthrough Thinking
• Demonstrating Coaching Agility
• Leveraging Each Phase in the Coaching Process
• Managing the Psychological Framework
• Developing Ourselves as Coaches
• Implementing a Transformational Coaching Culture

Location: Kew Business Centre, Level 1, 89 High Street, Kew, Victoria

Cost: $1175.00 (plus G.S.T.) - *groups of 3 people or more attract a discount

Booking Info: 61 3 9855 1436 or booking@oisinsuccess.com

Oisin is proud to welcome a new member to its team: Yvonne Yam. Originally from Shanghai but currently based in Hong Kong, Yvonne expands on our current capability to deliver our high impact learning interventions throughout the Asia-Pacific Region. Yvonne is an expert consultant and facilitator who is fluent in Putonghua (Mandarin), Yue (Cantonese), Wu (Shanghainese), and English.

Introduction

Companies that systematically and continuously pay attention to their organisational bench strength outperform companies that do not. A 2001 survey by the Corporate Leadership Council found that companies with an above average bench strength enjoyed above average growth. Bench strength is the ability of organisations to quickly fill key positions from within, with minimal disruption to the business. Whilst the issue of bench strength is relevant throughout an organisation, its effects are most obvious at the most senior leadership levels.

This month’s article focuses on how to develop strong leadership bench strength. It details the importance to organisational performance, reviews the key characteristics of effective leadership bench strength systems and presents some useful examples from leading organisations.

Bench Strength vs. Succession Planning

There are numerous examples of organisations that commit significant resources to succession planning but fail spectacularly when those plans are actioned. Traditional approaches to succession planning focus heavily on identifying leadership potential. This approach creates lists of people who are seen as having the potential to fill key positions, either at a moment’s notice or at some designated point in the future. The problem is, potential alone is too narrow a criterion to ensure that people have developed the broad base skills necessary to fill senior leadership roles.

Take for example, Douglas Investor a past CEO for Coca-Cola. He took on the role after the death of the previous CEO Robert Goizueta but was forced to resign after only two and a half years in the job. This came about following a significant slide in the company’s share price, some bad public relations moves and the poor handling of a product contamination scare in Europe. After operating for many years as CFO, he was clearly a prime candidate in Coca-Cola’s CEO succession plan. However, many believe that in promoting him to the CEO role, too much attention was paid to his financial ability and not enough on how his more general skills would impact on the broader CEO role. He failed, in part, because although he was well developed in at least one area of management he lacked ability in the more general competencies of public relations, building consensus and managing shareholders.

Successfully developing deep leadership bench strength requires a rigorous and long term process that pays as much attention to developing and retaining leadership talent as it does to identifying potential successors for key organisational roles.

Why is Bench Strength Important?

The fundamental reason for developing leadership bench strength is to ensure that key positions can be filled quickly, with minimal disruption to the business. This often translates to roles being filled from within. The time required for executive searches and selection can often be lengthy, resulting in major disruptions to the execution of key strategies. Consequently, not only do organisations need to know who the potential future people for key roles are, but they also need to have confidence these people are ready to perform in these roles without the need for immediate and rapid development.

The consequence of promoting from within has a number of advantages. These include:

• Cultural consistency at leadership levels

• Time to transition into new roles is reduced

• A connection to past tends resulting in change taking place more steadily

• Higher retention rates

• Promotion of a long term strategic view

Internal promotion also presents a number of potential pitfalls, including:
• Unhealthy internal competition manifested by:

• Compliant behaviors as opposed to strategic risk taking

• A focus on career building rather than on organisational performance

• An inwardly looking focus

• A tendency to retain the status quo as opposed to continuously improving

This means that the development of processes that build leadership bench strength need to take place within a framework of strong organisational values which support the advantages of internal promotion and mitigate the pitfalls. For example, many of the high performing Australian organisations identified in the book “The First XI” promoted their CEO from within, but also recognised the importance of maintaining a strong external business focus.

Steps for Developing Leadership Bench Strength

Developing bench strength is a complex and inexact science. However, the following five principles can help organisations establish systems that build steady and reliable pipelines of leadership talent.

1. Focus on Leadership Development:

   Developing bench strength requires a flexible system orientated towards development activities, rather than an inflexible list of high potential employees and the roles they might fill. In combining succession planning and leadership development you get the best of both activities: identification of the key leadership roles in the business, attention to the skills required for these roles and a development system that helps build those skills. Leadership development in this context is more than a series of one-off events. Research at the Centre for Creative Leadership in Greesboro, North Carolina, has shown that participants often return from such events highly motivated. However, the demands of their job quickly choke this motivation and the opportunity to make fundamental behaviour shifts is lost. It is much better to link classroom learning with real life and strategic issues and an exposure to a variety of jobs and bosses. Techniques such as job rotation, special assignments, action learning projects and ongoing coaching, will be far more successful in developing the key skills required for future leadership roles than simply identifying leadership potential. For Example, Eli Lilly, an international pharmaceutical company, conducts a biannual action learning program involving potential leaders, that provides an opportunity for them to focus on a strategic issue chosen by the CEO. Groups of cross functional potential leaders meet over a six week period with subject matter experts, best practice organisations and others, and then analyse what they have learned. Not only does this program force future leaders outside of their functional silos, it has resulted in useful strategic work for the company, strong internal networks and the creation of internal cultural and strategic links not gained in normal day to day activities.

2. Identify Linchpin Positions:

   Traditional succession planning has typically focused on a few positions at the very top of organisations. This presents a very narrow view and obscures the potential development opportunities that exist in other important roles. In order to widen the leadership talent pool organisations need to identify, in addition to the senior roles, other roles that are considered essential for the long term health of the organisation. These roles often reside in established areas of the business or are roles seen as critical to the future. In an engineering environment, for example, roles that manage production of established products would be considered a linchpin position, as would those with the responsibility for developing new products. As well as widening the leadership talent pool, linchpin roles in themselves present significant development opportunities for potential leaders. At Sonoco, one of the world’s largest manufacturer of packaging products, one key linchpin positions is that of plant manager. This role represents the first opportunity for people to be responsible for multiple functions as well as people management and public relations. Sonoco use these roles to help identify strengths and weaknesses in the leadership talent pool. What is significant is the regular review of each plant manager’s performance. The objective is not so much to identify successors for senior roles, but to openly identify experience and performance issues that could affect promotion and to design unique plans, including potential new roles, to address any significant gaps.

3. Make Processes Transparent:

   One of the keys to developing an active and motivated talent pool is being able to generate active participation. Traditional succession systems have been shrouded in secrecy, readily acceptable in older paternalistic cultures, but a strong demotivator in more modern open cultures. A transparent succession management system is characterised by:

   • An openness about such things as opinions on individual potential, access to development opportunities, where people stand in the succession system and views concerning individual strengths and weaknesses

   • Active involvement in decision making. This includes potential leaders being engaged in discussions concerning their strengths, weaknesses, potential development positions and career aspirations

   Immediate and easy access to information. Many organisations use web based tools to widen access to information and data analysis tools. Aviva Australia use a web based system that allows employees to personally record their career aspirations, development requests, qualifications and career history. Employees are charged with the responsibility of keeping their own records up to date. Groups of managers in conjunction with human resources use this information to help build detailed succession and development plans that are then shared with the individuals in development discussions.

4. Measure Progress Regularly:

   In moving to a more developmental focused philosophy, measuring success becomes a more complex and longer term issue. No longer is it sufficient to know who could replace the CEO and those in senior positions; instead you must know whether the right people are moving at the right pace into the right jobs, across a broad spectrum of the organisation. This requires a range of metrics to keep track of the effectiveness of bench strength activities. Dow Chemicals measure and track such things as internal hire rate – 75% to 80% is considered a sign of success. They also measure attrition rate of “future leaders” against the attrition rate of the total population of the organisation. Eli Lilly track the overall quantity of talent in their pipeline, the number of “ready now” candidates for each of their critical positions and the number of people showing as “ready now” on more than three succession plans.

5. Keep it Flexible:

   \In order for effective talent management systems to keep pace with changing business needs they need to be flexible and responsive. Consistent engagement with members of the talent pool and those making key succession decisions is vital to maintaining a robust and effective system. Hence, the tools and processes that support bench strength activities need to be easy to use and provide reliable and current information. Many organisations adopt a Japanese Kaizen approach, constantly making small changes in response to feedback from users. The use of technology can be useful in managing the volumes of information, but can often be a trap, becoming the driver of the system rather than a key tool. In fact, Dow reduced their reliance on technology in an effort to achieve greater speed and simplicity.

Conclusion

Academic research has demonstrated that organisations that actively develop their leadership talent enjoy above average growth. This is to a large extent due to their ability to quickly and seamlessly fill key leadership roles as the need arises. Organisations that are successful in developing leadership bench strength actively combine the disciplines inherent in traditional succession planning with strategic leadership development. They also build systems that:

• Utilise business linked processes, such as job rotation, as key components of the leadership development strategy

• Strategically utilise middle level “linchpin” positions to grow broad leadership capabilities

• Build internal transparency into the tools and process that support bench strength activities

• Rigorously measure progress and evaluate success

• Continuously improve flexible tools and processes

Consider you own organisation – do you have a robust system to identify and develop the key leadership talent throughout the organisation?

• Is there a direct link between your leadership development activities and your strategic intent?

• How often do development discussions take place with your key leaders?

• Do you have reliable processes that identify leadership potential?

• How many positions are evaluated in your succession planning? Does it include the consideration of “linchpin” roles in addition to senior roles?

• How often are your development and succession planning processes reviewed?

• What measures do you use to track progress and evaluate the success of your leadership development efforts?

www.wharton.upenn.edu/

This month’s link of the month is the Wharton Business School at the University of Pennsylvania. Within this site you will find a wealth of information; the “Research and Analysis” section in particular contains a number of articles and publications of interest to organisational development professionals. If you have a particular interest in the topics of succession planning and bench strength, be sure to have a look at the February 2004 issue of e-buzz (the e-Newsletter for Wharton Executive Education).

Growing Your Company’s Leaders: How Great Organizations Use Succession Management to Sustain Competitive Advantage
by Robert M. Fulmer, Jay A. Conger, Jay Alden Conger

Growing Your Company’s Leaders: How Great Organizations Use Succession Management to Sustain Competitive Advantage by Robert M. Fulmer, Jay A. Conger, Jay Alden Conger offers the results of a study of five global leaders in succession strategy: Dow Chemical, Dell Computer, Eli Lilly, Pan Canadian Petroleum, and Sonoco. The book examines what these and sixteen other high-profile organisations are doing to identify, secure, and prepare the next generation of leaders.

The research covers:

• The link between succession management and business strategy

• The architecture of good plans and how technology can make them better

• The importance of individual employee development

• Why senior management support is crucial

• How to monitor the effectiveness of the succession management system