Organizations have never had a harder time filling key leadership positions. When senior managers look at the talent in their organizations, they often find that downsizing has left them with a shrinking pool of high-potential candidates. The managers who are there don’t have the range of experience and skills necessary today, not because they are lazy or untalented but because they have lacked the opportunities to develop themselves.
THE TRADITIONAL WAY DOESN’T WORK
The traditional replacement-planning process can consume an inordinate amount of time. One major U.S. company discovered that it was devoting 250,000 executive hours a year to completing and discussing replacement-planning forms. What’s worse, companies aren’t getting much of a return on that time investment. Most organizations that have done research on their succession-planning process have discovered that their designated backup personnel actually fill fewer than 30 per cent of the open positions for which they were slotted.
PepsiCo gives up traditional replacement planning
One company that recently scrapped its traditional replacement planning process is Pepsico. It did so after a research study revealed that HR work was consuming hundreds of thousands of executive hours each year. Pepsico decided that this investment was far beyond its value to the company, and introduced a new replacement system which groomed high-potential people for organizational levels rather than a specific job. Decisions about moving high-potential people up the organizational ladder are now made by senior executives, who balance the company’s need to fill certain positions with the needs of the individuals being developed.
PepsiCo reports considerable success with the high-potential program, which is in its third year of operation and has been fully implemented in a number of divisions throughout the world. With less “HR work” to handle, executives are able to devote more time to “business work.”
ACCELERATION POOLS: SUCCESSION MANAGEMENT FOR THE 21ST CENTURY
In our book, Grow Your Own Leaders (DDI Publishing, 2001), we advise organizations to develop executive talent through acceleration pools comprised of high-potential candidates who are tracked by the senior management team. Like the Pepsico program, the acceleration pool system develops candidates for executive levels, rather than targeting one or two hand-picked people for each executive position. Pool members are assigned to stretch jobs and task forces that offer the best learning and highest visibility, and accelerate individual development. Candidates have an assigned mentor, receive more feedback, coaching and training, and participate in special developmental experiences such as university executive programs and in-company action learning sessions.
In an acceleration-pool system, senior executives no longer need to worry about replacement decisions in the organization, except for top positions. The annual chore of completing replacement-planning forms is eliminated, allowing executives more time to focus on developing tomorrow’s leaders.
The structure of acceleration pools varies with the size and structure of an organization. A larger organization might have two pools, organized by management levels, a supervisory/professional level and a middle-management level. Pools might also be organized according to functions. In a manufacturing organization, for example, one acceleration pool might exist to fill top plant-management positions, while a pool of middle managers might be designated to fill a range of corporate positions. Large, strategic business units (SBUs) often have their own acceleration pools to fill senior positions in the SBU, in addition to the wider company pool that fills senior corporate management positions.
HOW ACCELERATION POOLS WORK
Acceleration pools attempt to provide two things traditional succession management systems often do not: an accurate diagnosis of development needs, and an environment that motivates individuals to change.
Diagnosing development opportunities
Once pool members have been identified, they are assessed on the basis of four sets of “executive descriptors” that define what leaders need to know and must be able to do. Senior executives select specific descriptors for their organization.
Organizational knowledge (What I know): The functions, processes, systems, products, services or technologies of an organization that a general manager must understand—for example, knowledge of the company’s complete range of products.
Job challenges (What have I done): The kinds of situations that an individual entering top management should have experienced or at least have been exposed to, such as developing and implementing a plan to cut costs.
Competencies (What am I capable of): The clusters of behaviour, knowledge, technical skills and motivations that are important to success in senior management, such as “entrepreneurial insight” or “change leadership.”
Executive derailers (Who I am): The personality traits that might cause an otherwise effective senior leader to fail—approval dependency, arrogance, defensiveness, eccentricity, imperceptiveness, impulsivity, low tolerance for ambiguity, micromanagement, risk-aversion, self-promotion, lack of discipline and volatility.
A variety of methods are used to diagnose the development needs of pool members, including the Acceleration Center (a modern-day assessment centre), multiple-perspective (360°) instruments, and interviews. An HR professional explains the results of the diagnosis to each pool member and checks for personal or retention needs that would shape development. They decide together how the pool member can maximize the impact of his or her identified strengths and prioritize development needs, creating a Development Priority List.
Executive Resource Board
An Executive Resource Board (CEO/COO and senior line managers) is responsible for placing pool members into situations where they can experience job challenges, obtain organizational knowledge, develop competencies and overcome executive “derailers.” This is accomplished through a combination of short, high-impact, targeted training programs; short-term learning experiences (e.g., attending conventions); and, most of all, meaningful, measurable job or task force assignments. Jobs, task force membership and other longer-term assignments are the most important factors in developing acceleration pool members because they offer opportunities to satisfy several development objectives at once. It is very important to note that all development is within the context of high-quality job performance—not something done in addition to an individual’s job. There is a clear link between successful development and job success.
The Executive Resource Board also determines who should receive major training, such as university programs or programs developed exclusively for acceleration pool members, also called action learning. An action-learning program enables pool members to work in teams as they confront major organizational issues and make recommendations to senior management. The board uses the Development Priority List and its understanding of individual pool members’ personal and retention needs to make these decisions.
The Executive Resource Board typically meets with the heads of organizational or business units at least twice a year to review major personnel movements and discuss talent development. Board members review acceleration pool members’ progress and consider ways to speed their development. As specific solutions to individual development needs are considered, business demands and associated job requirements are considered as well. These factors result in a series of trade-off decisions about how to develop a pool member and when to place the person in a key role. Organizational movement can be horizontal as well as vertical, and the board relies heavily on task force assignments to minimize moves that would adversely affect a pool member’s personal life.
After job and training assignments are made, a representative of the Executive Resource Board contacts each pool member to discuss how the assignment or training fits with the person’s development priorities and interests. This is how pool members learn what specific competencies and challenges they will work on in their new assignments. Pool members understand the purpose of the assignment or training and its potential value to their development, so they are more likely to be enthusiastic and fully committed to its success.
TARGET AREAS AND STRATEGIES FOR DEVELOPMENT
Pool members meet with their current managers and their mentors to pin down the specifics of how to develop the competencies, job challenges and organizational knowledge suggested by the Executive Resource Board while also accomplishing the objectives of their job assignment. Usually the effective completion of the assignment is itself the principle development goal. Other development goals are always closely tied to assignment success. The manager, mentor and pool member might discuss, for example, how to deal with a “derailer” that could cause problems as the individual moves toward task accomplishment. This discussion is where the “rubber meets the road” in development. The manager and the mentor are prepared for their roles through orientation and training.
In preparation for these meetings, acceleration pool members complete the first part of a Development Action Form for each of the areas to be developed. This form forces pool members to think about how they will achieve the targeted development, how they can apply the newly learned development targets on the job, and how they will measure the effectiveness of the application. This encourages pool members to focus on applying skills, behaviour and knowledge rather than on merely learning them in an abstract sense. Acceleration pool members should not be evaluated on completing a training program, for example, but rather by measuring organizational change brought on by use of new skills or knowledge in the workplace. With application targets defined before a training program, pool members are able to focus on applying development goals during the training. They are in a better position to tap into an instructor’s special knowledge or get coaching from other people. Most important, they see the development project as part of their job.
POOL MEMBERS DOCUMENT DEVELOPMENT
Each acceleration pool member keeps a Career Development Portfolio, which includes his or her Development Priority List, an up-to-date personal information form, completed performance appraisal forms, and completed and in-progress Development Action Forms.
When entering the acceleration pool, members agree to make the contents of their portfolio available to the Executive Resource Board. The Board, in turn, agrees to review the portfolios every six months—a relatively easy task if portfolios are posted on the corporate intranet with access limited to respective pool members and the Executive Resource Board.
ACCELERATION POOLS: A TOOL FOR TODAY
We believe that acceleration pools meet the needs of 21st century organizations and managers much better than older models of succession management. The Executive Resource Board offers a more accurate and organized way of making decisions about who gets into the acceleration pool, and more meaningful information on which to make development decisions about pool members. We have seen the efficiency of boards and the quality of their discussions changes completely as they adopt the more behavioural, data-oriented approach of acceleration pools.
Acceleration pools are significantly less time-consuming for managers, who can dispense with the annual replacement-planning forms. Putting the responsibility for record keeping on the people being developed, and providing them with forms to guide their discussions and planning maximizes the relationship between pool members, managers and mentors. Their meetings are more productive and meaningful. Most important, companies will have the leaders they need. In the end, acceleration pools are not a cure-all, but they are being used successfully in organizations of every size and shape.