A large insurance broker had recently lost three key
Executive Directors and discovered that while it had a succession plan in
place, in practice it wasn’t substantial enough and was instead designed to
simply fulfil regulatory requirements with “names in the frame”.
No development had been put in place to ensure that
successors could step up into the roles and in most cases only HR and the CEO
knew who was designated for each role as a successor to avoid creating
political problems and raising expectations that may not be fulfilled.
It was recognised that had the matter been
approached with greater openness and the investment made to develop people, the
firm would not find itself looking externally for at least two of the
candidates. This would have reduced the investments in cost and time that were
now required to coach and intensively train the only successor able to fulfil
one of the roles.
The Remuneration and Nominations
Committee asked BP&E Global to develop a new approach
to succession planning that would avoid this situation occurring again. As
well as addressing the concerns about transparency and individual motivation
that had now arisen within the organisation.
In the first instance
BP&E Global and the organisation agreed clear goals for the project and a
plan to reach those goals. The project team leader was a Director
of BP&E Global who lead the team comprising of two BP&E
Global consultants and representatives from HR, Training, and the four
main business areas.
The goals were:
have a clear and communicated succession planning policy
identify the roles within scope of succession planning
devise the means of communicating the plan to individuals
propose a development programme that would ensure successors could step into
their next role when needed.
The timescales were to reach these goals within 2
months of starting the process.
The working party met every fortnight and whilst the work
was led by BP&E Global, our concern was to ensure that all parts
of the business were involved in formulating the approach. This group also
had a role in communicating how this would work and why the approach had been
We were also concerned that the Succession Planning policy
made sense with the Performance Development approach and that there was a
seamless transition for individuals selected as successors from the normal
development review to the more formal successor leadership development.
The first draft of the policy became known as “Focused
Development Programme” and included:
- Purpose and goals
- Roles within scope
- Selection criteria and approach
- Identification of development needs
- Options available for development
- Half yearly assessment of progress
- What happens when you are ready for promotion
There were considerable concerns raised
that the openness of the approach would firstly, create disaffection from those
not selected and, secondly, that when ready for promotion there would not be
roles available and those people would be lost.
The risks associated with
different routes to meet the goals were discussed and all agreed that action
should be taken to develop successors properly.
To resolve the debate a formal risk assessment was
undertaken with the financial implications of a more guarded approach versus a
fully communicated policy were compared. Perhaps the most difficult point was
to assess the financial benefits of having better developed people in roles
than before and this was resolved by the risk team who arrived at a formula linked
to improved business results.
Two months after the project commenced the Steering Group
agreed that the open proactive approach to development should be pursued and it
was agreed that by having this debate and putting the risks and benefits of the
alternatives in perspective had been of great value.
The roles in scope were two levels
below Director and following an initial launch event and the selection of the
first tranche of successors a two-year programme of training, coaching and
mentoring was put in place.
Topics for development were
similar to an MBA programme and included:
- Strategic Management
- Risk Management
- Business Finance
- Management Information
- Legal and regulation
Despite the risks, a staff survey one year after the launch
of the scheme indicated that 85% of staff felt that the Focused Developed
Programme was Fair or Very Fair.
Of the 12 Successors identified one had been promoted after
their Manager had left the business and another was ready to take over from a retiring
The board monitored
progress each half year following the assessment of Successors and recorded
that they felt that this had been a wise decision as an unexpected benefit had
been a reduction in staff turnover due, they
felt, to the feeling that the company took staff investment and progression
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