Planning for the Future: Succession Planning and Culture

Mike Caston & Billy CothranFebruary 23, 2019

What is Organizational Culture?

Organizational culture is difficult to define, difficult to change and is unique for every organization.

• The ways the organization conducts its business, treats its employees, customers, and the wider community,

• The extent to which freedom is allowed in decision making, developing new ideas, and personal expression,

• How power and information flow through its hierarchy, and how committed employees are towards collective objectives.

What Shapes an Organization’s Culture?

A. Organizational Charts?

B. Leadership?

C. Employees?

Keys to Shaping Culture

Build around the right people…

• Beginning with “who,” rather than “what,” allows you to more easily adapt to a changing world.

• Having the right people on the bus makes the problem of how to motivate and manage people largely go away.

• Have the wrong people on the bus? It doesn’t matter whether you discover the right direction; you still won’t have a great company. “Great vision without great people is irrelevant.”

The right people don’t need to be tightly managed or fired up. They will be self-motivated by the inner drive to produce the best results and to be part of creating something great.

But wait, there’s more…

Leadership is essential…

“It’s easy to think that building a culture is about other people’s behaviors, not how you act as a leader but…culture change begins when leaders start to model the behavior they want the organization to emulate.”

“If you are interested in changing the culture of your organization, your first step should be to look in the mirror and make sure you are setting the kind of behavioral example you want everyone else to follow.”

– Jim Whitehurst , Harvard Business Review

What Shapes an Organization’s Culture?

A. Organizational Charts

B. Leadership

C. Employees

D. All of the Above

Shaping Organizational Culture

Boards, commissions, leadership, and employees all must be on the same page and share the same mission and values to maintain and perpetuate the desired culture.

The organizational chart will reflect this.

“Organizational culture is defined by how people inside the organization interact with each other. Culture is learned behavior…We create our organizational culture by the actions we take; not the other way around.”

- Jim Whitehurst, Harvard Business Review

So, Now What?Succession Planning

What is a Succession Plan?

• A strategy for identifying and developing future leaders at your company at all levels.

• Addresses the inevitable changes that occur when employees leave (voluntarily or involuntarily)

• Makes sure the business is prepared for all contingencies by identifying and training high-potential workers for advancement into key roles.

Promoting from within…

Look from within the organization:• Internal hires retain organizational knowledge and get up to speed in their

new roles more quickly than external hires.• Hiring internally increases employee engagement.

– People tend to refer others more frequently when their own career has grown within the organization.

Conditions:• Organizational culture is thriving• Succession planning and performance reviews are consistent • Specific skills are available internally or capable of being acquired with training

Hiring from outside…

Look outside of the organization:• When there is a desire for an organizational culture change• When succession planning and regular performance reviews do not occur or are

inconsistent or misunderstood,– No way to know who might be the best person in the organization for the role. The assumption is that

they don’t exist, or it’s easier to just look outside.

• Specific skills needed are not readily available in the organization• Processes are in place to provide new hires training and full integration into

position

It pays to nurture and promote from within…

Wall Street Journal 2012 Study:• External hires get paid more (18% more)• External hires often receive significantly lower marks in performance

reviews• External hires are much more likely to get laid off than are those promoted

from within (61% more likely to be fired)• Employers underestimate the time it takes for workers to get up to speed• The performance of others decline because they have to work to help bring

the new hire up to speed.• Silver lining: Bringing in an employee from the outside also tends to raise

the pay for everyone in the unit.

Reshaping SJWD’s culture(Definitive Core Values)

• In 2016, the SJWD Management Team began the process of developing a five year Strategic Business Plan

• Desired to shape the organization around a more succinct mission, vision and a restatement of our definitive core values.– Lead with Integrity– Excellence and innovation in service to our

customers– Accountability for our results– Devotion to our employees

Reshaping SJWD’s culture(Getting the Right People on the Bus)

Caused us to seek the kind of people that could help us fulfill our mission and perpetuate desired culture.

Ideal Team Player (Humble Hungry, People-Smart):• Integrated into hiring process• Self-assessment for existing

employees• Integrated into performance

reviews

SJWD Succession Planning

We recognized that if we appropriately shaped our culture, our leadership would come from within, not from the outside.

• Focused initially on leadership positions– Intended to help avoid many of the pitfalls and voids associated with the

departure of key personnel– Identified key employees and when they could potentially leave/retire (within

less than 5 years)– Identified the critical knowledge and competencies held by these employees– Identified if there are potential, suitable replacements within SJWD

SJWD Succession Planning

We recognized that if we appropriately shaped our culture, our leadership would come from within, not from the outside.

• Began training for high-performing employees• Revamped the performance appraisal process to be more simple and

consistent • Now working on developing succession plans for other key roles within the

organization

Conclusion

• Do not separate organizational culture from succession planning: – Having the right people on the bus and putting them in the right seat is far more

important to the success of any organization

• Promoting from within should be a first option; however, it is far better to hire externally than promote someone internally that is not qualified

• Develop and maintain consistent and transparent performance reviews• Develop and maintain legitimate succession plans

– Identify the key roles/positions– Identify potential replacements (Do they exist?)– Train & prepare

"An empowered organization is one in which individuals have the knowledge, skill, desire, and opportunity to personally succeed in a way that leads to collective

organizational success." --Stephen Covey

“In highly evolved organizations where succession planning and performance reviews happen regularly, and transparency of hiring practices is the norm, looking to internal candidates first is natural.”

where succession planning and regular performance reviews do not occur or are inconsistent or misunderstood, the opposite may be true.

“Then the first step is to look externally, because there is no way to know who might be the best person in the organization for the role. The assumption is that they don’t exist, or it’s easier to just look outside.”

“…Develop a strong corporate culture first and foremost.” (David Cummings, Co-founder of Pardot)

“…culture isn’t just one aspect of the game, it is the game. In the end, an organization is nothing more than the collective capacity of its people to create value.” (Louis Gerstner, IBM)

“A goal without a plan is just a wish.” (Antion de Saint-Exupery - French writer, poet, aristocrat, journalist, and pioneering aviator)

“Planning is bringing the future into the present so that you can do something about it.” (Alan Lakien – author on personal time management)

“A wise man thinks ahead; a fool doesn't and even brags about it!” (Proverbs 13:16, TLB)

“The plans of the diligent lead to profit as surely as haste leads to poverty”. (Proverbs 21:5, NIV)

“Do to others as you would like them to do to you.” (Luke 6:31, NLT)

“Do nothing from selfish ambition or conceit, but in humility count others more significant than yourselves.” (Philippians 2:3-4, ESV)