While organizations have evolved substantially in how they develop a strong pipeline of leadership talent, some significant gaps still exist. The overall inability to discover and quantify the people-drivers of business outcomes continues to hinder the succession planning process within organizations. We provide you with an approach to create a succession planning process that assesses your talent based on the competencies, skills, experiences and other elements that affect business outcomes, while quantifying the quality of your talent pool. A customizable succession planning scorecard is provided to show you how to have the most impact on the business when planning your next talent moves. This presentation will show you a succession planning process that:, • Focuses talent decisions on key drivers of business • Incorporates analytics into talent assessments • Creates metrics based on the overall quality of your talent pool • Utilizes performance and potential reports that are business-focused

1. Business Focused Succession Planning
Shane Douthitt, Ph.D.
Scott Mondore, Ph.D.
Strategic Management Decisions

2. Learning Objectives
• Identify and assess employees on the competencies,
skills, personality tendencies, etc. that lead to high
levels of performance
• Utilize analytics to objectively:
▫ Assess High-Potential Talent; Differentiate High From Low
Performers
▫ Assess Overall Talent Pool Effectiveness
▫ Uncover Individual and Group Leadership Development
Needs
• Align succession planning efforts with strategic
business goals and demonstrate an impact on bottom
line results

3. About SMD:
Linking People Data to Business Results
Our Platform
• Implement Talent Management processes based on analytics, linking
people to critical business outcomes
• Partner with our clients to create and execute people strategies that
drive business outcomes and maximize ROI
Our Results
• Linkage of Talent Management (e.g., engagement
survey results, training, performance ratings,
competency assessments) to a variety of business
outcomes:
▫ Operations Metrics (e.g., operating margin)
Connecting Employees ▫ Financial Metrics (e.g., sales dollars, productivity)
to Business Results ▫ Customer Satisfaction
• HR Strategy & Planning ▫ Turnover/Retention
• Human Capital Measurement
• Talent Management ▫ Employee Safety
• Leadership Development
• Executive Assessment & Coaching • Significant bottom-line improvements and
• Organizational Effectiveness
return-on-investment for our clients.

4. Presenter Bio
Scott Mondore, Ph.D.
Scott has over 15 years of experience in the areas of strategy, talent management,
measurement, customer experience and organizational development. He has internal and
consulting experience across a variety of industries including transportation, healthcare,
manufacturing, pharmaceuticals, utilities, and hospitality.
Scott is currently a managing partner of Strategic Management Decisions (SMD). Before
SMD, he served as East Region President for Morehead Associates, a healthcare HR
company. Before joining Morehead, Scott worked as a Corporate Strategy Director at Maersk,
Inc. He also worked as an Organizational Effectiveness Leader at UPS, focusing on
employee assessment and measurement as well working as a consultant to large and small
organizations in both the private and public sector.
Scott is the co-author of “Investing in What Matters: Linking Employees to Business
Outcomes” (SHRM, 2009) and “Business-Focused HR: 11 Processes to Drive Results”
(SHRM, 2011). and has published several articles on various topics, including employee
turnover, employee safety, coaching, litigation and leadership.
Scott holds a master's degree and doctorate in industrial/organizational
psychology from the University of Georgia.

5. Presenter Bio
Shane Douthitt, Ph.D.
Dr. Shane S. Douthitt is a co-founder and managing partner of Strategic Management
Decisions (SMD). He has more than 18 years of experience in the areas of measurement,
talent management, executive assessment and coaching, and organizational development
across a variety of industries. Before SMD, he was the SVP of Sales and Product
Management at Morehead Associates—a healthcare HR consulting company. Before joining
Morehead, Shane worked as a Senior Vice President of Human Resources & Leadership
Development at Bank of America. Shane also worked as a consultant for Towers Perrin and
IBM.
Shane is the co-author of “Investing in What Matters: Linking Employees to Business
Outcomes” (SHRM, 2009) and “Business-Focused HR: 11 Processes to Drive Results”
(SHRM, 2011). In addition, he has published several articles in leading journals on a variety of
topics, including HR strategy, measurement, teams, individual differences and diversity,
employee selection, group dynamics, and careers, and leadership development.
Shane holds a master's degree and doctorate in applied psychology from the University of
Georgia, as well as a master’s degree in industrial/organizational psychology
from the University of Tulsa.

6. RETHINK Your Approach to HR!
Make HR a Profit Center
• Quantify the impact of employees on business outcomes
• Calculate an expected ROI for investments in employees
• Define the relationship between HR processes and business outcomes
Connect Key HR Processes
• Provide a single, integrated view of key HR processes
• Reduce your HR related costs through integration and strategic alignment
• Connect HR processes to business results
Spend More Time Driving Results
• Align HR professionals, organizational leaders, & employees to focus on actions
that drive results
• Provide customized analytics and simplified reporting through business-focused
scorecards

7. Talent Link Key HR Processes
Performance Examples of
Management Business Outcomes
People
Training Selection
• Turnover
• Employee engagement
Service
• Customer satisfaction
• Wait times
Quality
Career Business Employee
Development Outcomes Survey • Clinical outcomes
• Product Defects
Finance
• % to budget
• Cost reduction
Growth
Competency
360 Feedback • Sales growth
Builder
• Margin growth
Succession
Planning

8. Key HR Processes in One Place

9. SMD Publications
Published by The authors’ practical
SHRM (2009) approach, “Focuses HR
leaders on where to put their
limited time, energy, and
resources to maximize both
individual and organizational
#3 SHRM Best-Seller
performance.”
Published by
SHRM Vicki Escarra, President and
(2011) CEO
Feeding America

10. Session Agenda
• The current state of succession planning
• Building a business-focused succession plan
▫ Performance versus Potential
▫ Assessing the Business Impact of People Data
▫ Examining Organizational Strengths & Gaps
▫ Identifying Top Talent through Comprehensive Talent
Review Sessions
▫ Aligning Development Planning with Business Needs

11. Applied Research and Trends

12. 2011 SHRM Poll
426 Organizations of all sizes
• Less than a quarter (23%) of organizations currently have a
formal succession plan in place
• More than one-third (38%) have informal succession plans
• Almost one-third (30%) of organizations evaluate or update their
succession plans once a year.
• Almost one-half (43%) of the respondents indicated that more
immediate requests take precedence in the organization over
developing a formal succession plan.
• Other organizations stated that they have not yet given
consideration to succession plans (16%) or feel that their staff
size is too small (15%).

13. Succession Planning Obstacles
Study of 29 Multinational Companies (Guthridge, Komm & Lawson)…
Senior leaders not spending high-quality time 54%
on talent management
Line managers not committed to people 52%
development
Organization is siloed; limitations in sharing of 51%
resources
Line managers unwilling to differentiate top 50%
and bottom performers
Senior leaders not aligning talent mgmt. with 47%
business strategy
Succession planning processes not rigorous 39%
enough to matching right people to right roles

14. What Our Clients Are Saying…
“We just don’t “We move “Our high- “Employees “Our ‘9-box’
spend much people around potentials are have to be talent reviews
time on when we have often identified ‘noticed’ by a are dominated
succession to.” by their senior leader by the biggest
and talent likeability.” to get any real titles and
planning.” development loudest
opportunities.” voices.”

15. Typical Approach to Succession Planning
• Focuses only on replacing the CEO
• Provides generic leadership development
opportunities
• Produces highly subjective ratings of performance
• Creates subjective pools of ‘high-potentials’
• Is misaligned with career aspirations of talent
• Does not leverage employee data to
focus on key business drivers

16. The Opportunity
• To discover the competencies, skills, experiences, etc.
that drive business outcomes
• To identify top talent based on performance on key
business drivers
• To make succession decisions based on analytics and
data—not on likeability
• To align succession planning with the business
strategy and drive results across the organization
• For HR to take the lead in making the process
business-focused

17. Aligning the Business Strategy, People Development Strategy,
and Program Design

18. What is Succession Planning?
A comprehensive approach to ensuring the right people are
in the right jobs at the right time.
Succession
Planning
*Succession Planning should
not occur in a vacuum*
Career
Leadership
Assessment/
Development
Development

19. Succession-Planning Process
Identify Critical
Roles
Develop Assess Leader Ready Now
Leaders and Performance & Replacements
Talent Pools Potential when Needed
Calibrate
Identify
Ratings Based
Potential
on Business
Replacements
Drivers

20. Employee Provided Information

21. Identify “Critical Positions”

22. The Foundation of Succession Planning:
Performance vs. Potential
Goal: To predict future performance
• The best way to predict future performance is to look at past
performance (i.e., the “what” and the “how”) and systematically
assess future potential.
Sample Performance Scale: Sample Potential Scale:
1 – Fails to Meet Expectations 1 – Placement Issue
or Unacceptable 2 – Grow in Position
Performance 3 – Promotable
2 – Sometimes Meets 4 – High Potential
Expectations or Needs
Improvement
3 – Meets Expectations or
Quality Performance
4 – Consistently Exceeds
Expectations or Superior
Performance

23. Clearly Define Potential

24. Provide Even More Clarity

25. Traditional Succession Planning Process
Assess Identify High Our Business-Focused
Critical Potential Approach takes succession
Positions Talent planning to the next level by:
• Utilizing analytics to
differentiate high from low
performers
• Assessing both individual
and systemic development
Assess needs
Monitor &
Development • Aligning development
Review
Needs plans with the business
strategy
Build &
Execute
Development
Plans

26. Assess Business Impact:
Business Partner RoadMapTM
1. Determine
Critical
Outcomes
2. Create Cross-
6. Measure &
Functional Data
Adjust
Team
Business Partner RoadmapTM
5. Build
3. Assess
Program &
Measures
Execute
4. Analyze the
Data

27. Assess Business Impact:
Succession-Focused Assessment
• A best practice in Skills/
succession planning and Competencies
leadership development
programs is to include
leader assessment,
feedback, and
development planning.
Experience
Integrated Personality
• The assessments are Assessment
intended to identify
strengths as well as gaps in
leaders’ skills, abilities,
competencies; particularly
to expose gaps in critical Employee
competencies identified Survey Results
earlier.

28. Assess Business Impact:
Potential Assessment Tools
• Behavior-based assessment
▫ Quantitative 360 feedback;
▫ Competency Ratings from performance reviews
• Personality
▫ Hogan Personality Inventory
▫ 16PF
• Professional/Leadership Experiences
▫ Experience Profiler
• Employee Survey Results
(management style/effectiveness)

29. Assess Business Impact:
Analytic Approach – Structural Equation Modeling
• Traditional data analysis includes:
• Qualitative analysis or gap analysis (strengths/weaknesses)
• Correlation
• Regression
• Advantages of SEM:
• Consider multiple independent & dependent measures
concurrently
• Imply causality
• Calculate ROI
• Correct for measurement errors
• SEM is commonly used in other industries
(econometrics, market research)

30. Assess Business Impact:
Executing the Analyses
• “Apples to Apples” Comparison: Line up each leader’s
individual data (e.g. 360, employee survey) with their
performance outcomes (e.g. percent to goal on
business outcomes)
• Identify Key Drivers: Run statistical analyses (i.e., SEM)
to identify the individual factors that evidence the
strongest relationships with performance outcomes
• Get help on the analyses—don’t let it be a barrier to
executing the process

31. Assess Business Impact:
Linking People Assessments to Business Metrics
Identifying Critical Competencies/Experiences that Drive Business Outcomes
The linkage analysis will Leadership
demonstrate the level of Competencies
impact that each
competency, experience,
Personality
skill, etc. has on individual
Factors
performance and business
outcomes.
Technical Critical Business
This allows leaders to Skills/Abilities Outcomes
focus on the most
important competencies,
skills, experiences and Experience
determine the appropriate
level to invest in
developing each area. Employee
Attitudes

32. Examine Strengths and Gaps:
Business-focused Ready Now ScorecardTM
Utilize the Ready Now Scorecard to Assess Overall Talent Pool Health…
Key Drivers of Business Outcomes
• Refer to the scorecard during talent review sessions; incorporate
stakeholder ratings of performance and potential to identify true
Ready Now talent
• Assess performance strengths and gaps across the entire talent pool

33. Calibrate Performance & Potential
9-Box Report

34. Identify Top Talent:
Goals for Facilitating Talent Review Sessions
• High Potential Assessment
▫ Evaluate ‘expandable’ talent based on performance on
business drivers
• Comprehensive Talent Review
▫ How much and what type of talent do we need to sustain
success and execute on our strategy?
▫ Have we made a sufficient number of talent moves and filled
necessary gaps from the last time we had a talent review?
▫ What lateral moves/promotions/special projects have we
moved our high-performers and high-potentials into in the last
year?
• Achieve diversity goals and/or organizational goals, as
needed

35. Identify Top Talent:
Goals for Facilitating Talent Review Sessions
• Role Clarity
▫ What jobs ‘feed’ the role; what jobs come next?
▫ Focus on creating career paths for critical jobs
• The “9-Box” Discussion
▫ Using analytics, it differentiates talent based on business driver
performance
▫ Great companies continue to leverage its effectiveness
• Performance Management
▫ Hold leaders accountable for individuals in “does not meet
expectations” categories
▫ Make decisions of “up or out” on talent in critical roles

36. Selecting Ready Now Replacements

37. Launch Leadership Development Program:
Alignment with the Business Strategy
Step 1: Explicitly outline the organization’s
Business leadership strategy; The leadership strategy
Strategy and goals will provide the “blueprint” for the
actual program
• Factors that influence a leadership
strategy:
▫ External business trends
Leadership
Strategy ▫ Key business strategies
▫ Required organizational capabilities and
competencies
▫ Leadership and business priorities
Leadership ▫ The organization’s culture
Program ▫ Performance objectives
Design

38. Launch Leadership Development Program:
Alignment with the Business Strategy
Step 1 Continued…
Business
Strategy • Create a Leadership Development committee
or conduct a series of key stakeholder
interviews to provide the necessary input. Key
factors to consider:
o How will the business strategy impact the
Leadership organizational design in the next 3-5 years?
Strategy o Given the business strategy over the next 3-5
years, what types of leaders are needed?
(Experiences Required? Competencies
Needed?)
Leadership o How will future leadership roles be filled?
Program (internal, external, or a mix)
Design

39. Develop Top Talent:
Program Design and Components
• Your business-focused leadership strategy and
program goals determine the program’s design and
content.
• Consistent with best practice, potential program
components include:
▫ Assessment, feedback, and development planning
▫ Coaching and/or executive mentoring
▫ Action learning teams focused on real business issues
▫ Exposure to the strategic business agenda
▫ Job assignments or rotations
▫ Group learning activities
▫ Team building/development

40. Develop Top Talent:
Sample Leadership Program Overview
Phase 1. Phase 2. Phase 3. Phase 4 .
Design Program Assessment & Group Learning Coaching &
Feedback • Execute group Program
• Define program
objectives and create • Kick-off program and learning sessions. Review
“blueprint” orient participants; • Execute learning • Provide coaching
complete action team projects during periodic 1:1
• Select and build assessments
customized program • Observe and provide meetings
components • Aggregate feedback & coaching • Participants have, as
assessment data and needed, access to
• Build customized produce an overall
leadership coaches throughout
leadership report the process
assessment process
• Provide feedback to • Wrap-up program
• Match & train participants and
assessors build development • Evaluate program
plan effectiveness

41. Business Focused Succession Planning:
Success Metrics
• Business-focused assessment of the organization’s
Talent Pool
• More “Ready-Now” Candidates in the Leadership
Pipeline
• Overall Talent Pool Health Assessment & Tracking
• Expanded Opportunities for High Performers:
▫ Lateral Moves
▫ Cross-Functional Projects
• Reduced High Performer Turnover
• Increase Perceptions of Career Opportunities on the
Employee Survey

42. Integrating Succession Planning and Compensation
Potential and Position in Pay Range
Director Level Employees
0-20% 20-40% 40-60% 60-80% 80-100%
John Doe
High Potential Matt Madson Mary Matlock Jane Doe
Mitch Daniels Meggin Gowen Carol Johnson Scott Donovan Sam Smith
Billy Ryan Tom Tuberville Amy Andrews Jill Rogers Jim Johnson
Promoteable Katie Bradford
Sasha McDonald Carter Smith Julie Jones
Shane Donovan John Mondore Jason Kidd Sam Bradford
Grow in Erin Dry
Position Marc Ward
Ricky Bobby Gena Vantuyl
Tommy Timmons Brett Favre Sherry Hartnet Chris Payey Jason Murry
Placement Issue Bobby Bean
Jerry Jones Janice Smill Billy Simmons
Mike Roberson Kim Klover Jill Vantuyl Mike Kelly Jodie Johnson
Performance ratings are integrated with your compensation philosophy to
pre-populate merit, incentive and equity recommendations

43. The Art & The Science
ART SCIENCE
▫ Customizing the approach to ▫ Linking employee data to
the organization based on business outcomes
current/future business ▫ Assessing Talent Pool Health
challenges (which can come
with assumptions) ▫ Creating leadership programs
based on true talent pool
▫ Facilitating Talent Review development needs and
meetings with leaders individual needs that drive
▫ Getting high potential talent business
on the right career path outcomes

44. Practical Tips
• Engage stakeholders early in the process:
▫ Ask stakeholders to identify the critical business outcomes
▫ Use stakeholder interviews to engage leaders across functions
• Focus on mid-to-upper level management positions—
not just the CEO
• Develop pools of talent for critical roles
• Make all leaders responsible for talent planning
• Remember to include a comprehensive approach to
career development and leadership development to
build the most effective pipeline of talent

45. What We Have Covered
How to make succession planning business-focused by:
▫ Using analytics to discover key talent performance on
elements that drive the business (individual and
group)
▫ Assessing and tracking talent pool effectiveness—
using the Talent/Succession Scorecard
▫ Making succession planning decisions based on facts
and data
▫ Effectively facilitating talent review sessions
▫ Aligning succession planning with career
development, leadership development, and the
business strategy

46. To Contact Us:
Scott Mondore, Ph.D.
Managing Partner
smondore@smdhr.com
(404) 808-4730
www.smdhr.com
Shane Douthitt, Ph.D.
Managing Partner
sdouthitt@smdhr.com
(704) 975-6820