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BP&E Global Case Study - Meaningful succession planning

The Problem

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 had been mere window dressing to 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 meter been approached with greater openness and the investment made to develop people the firm would not find itself looking for at least two of the candidates outside the organisation with the cost and time that involved and having to coach and train intensively the only successor able to fulfil one of the roles.

We were asked to develop a new approach to a succession planning that would avoid such a situation occurring again but also address the concerns about transparency and individual concerns.

The solution
In the first instance clear goals for the project to put in place an effective succession planning programmes and a plan to reach those goals needed to be agreed. To do this a Steering Group was set up comprising of the CEO, Head of HR, COO and CRO. 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:

• To have a clear and communicated succession planning policy
• To identify the roles within scope of succession planning
• To formulate a method of identifying and developing successors

The timescales were to reach these goals within 3 months of starting the process.

Terms of reference for the Working Party and Steering Group were drawn up with a plan by the Project Manager and agreed with the goals at the first meeting of the Steering Group.

The Working Party met every fortnight and while the work was lead by BP&E Global our concern was to ensure that all parts of the business were involved in formulating the approach and undertook some of the research and drafting of policy so that they had ownership when the project moved into implementation. They also had a role in communicating how this would work and why the approach had been chosen.

We were also concerned that the Succession Planning policy made sense with the Performance Development approach and 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 a policy that became known as “Focused Development Programme” which 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 opaque 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
• Leadership

The results

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 Director.

The board monitored progress each half year following the assessment of Successors and recoded 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 seriously.

If you would like to discuss any of the issues raised in this case study please email or call +44 (0) 20 7764 0721

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