SUCCESSION PLANNING Are you ready for this SUCCESSION

SUCCESSION PLANNING Are you ready for this?

SUCCESSION PLANNING - Are you ready for this? 50 Million!

Why Increased Retirements:

SUCCESSION PLANNING - Are you ready for this? 70% of companies say they do some form of succession planning, yet 62% say they have too few internal candidates to meet their organizational needs.

SUCCESSION PLANNING - Are you ready for this? What it isn’t and what it is

SUCCESSION PLANNING - Are you ready for this? Emergency Replacement Planning: Identification of back-ups for your critical positions

SUCCESSION PLANNING - Are you ready for this? Succession Planning: Developing the bench strength throughout the organization so when a vacancy occurs, qualified candidates are available within the organization.

SUCCESSION PLANNING - Are you ready for this? Succession Planning: Knowing where you’re heading and developing the talent pool to get you there.

Where is the knowledge? 7% Paper Documents Electronic Databases 13% Email 13% 16% Electronic Docs 51% Brains 0% 10% 20% 30% 40% 50% Many times and at higher-level positions, 80 - 90% of the corporate knowledge is in peoples’ heads!! 60%

Develop the talent pipeline What’s needed for future success? SUCCESSION MANAGEMENT What are the gaps? Assess your talent

SUCCESSION PLANNING - Are you ready for this? The heart of Succession Planning is the evaluation of your employees' performance and potential!

SUCCESSION PLANNING - Are you ready for this? Step 1. What’s needed for future success? • What are the positions that are mission critical to your organization’s future? • What are the competencies needed to be successful in these roles? • That is, what are the knowledge, skills, attitudes, and other abilities that are needed for success in the position. • “What should be” for success

SUCCESSION PLANNING - Are you ready for this? III. COMPETENCIES Competency Definition for an Accountant Knowledge - Professional knowledge and skill in accounting and ability to keep current with developments and trends. Knowledge and ability to use applicable information technology and systems to meet work needs. Financial Monitoring and Analysis Ability to monitor and collect data and to assess the accuracy and integrity of data. Ability to analyze data. Ability to ensure compliance with applicable standards, rules, regulations, and systems of internal control. Ability to interpret and evaluate results, prepare documentation, and create financial reports and/or presentations. Decision Making and Problem Solving Ability to use effective approaches for choosing a course of action or developing appropriate solutions and/or reaching conclusions. Ability to take action consistent with available facts, constraints, and anticipated consequences. Communication and Interpersonal Skills Ability to communicate information to individuals or groups and deliver presentations suited to the characteristics and needs of the audience. Ability to clearly and concisely convey information orally or in writing to individuals or groups to ensure that they understand the information and the message. Ability to listen and respond appropriately to others. Ability to establish effective working relationships that foster organizational success. Supervision Ability to recruit, select, counsel, discipline, establish performance standards, and evaluate performance of employees to retain a diverse workforce. Ability to administer and ensure compliance with human resources policies and procedures. Ability to monitor and assess work, provide feedback, and provide technical supervision. Ability to develop knowledge, skills, and abilities of employees and plan for and support employees in career development opportunities.

SUCCESSION PLANNING - Are you ready for this? Assess your talent Inventory of your talent pool. Who are “high potential” people? “Hi. Po” Who are the “high performers”? “Hi. Per” How do you do that?

Overview of the Performance/Potential Grid The Nine-Box Grid Performance • What - The matrix is used to evaluate an organization’s talent pool to identify the Hi. Po’s. High Performance Low Potential High Performance Medium Potential High Performance High Potential Medium Performance Low Potential Medium Performance Medium Potential Medium Performance High Potential Low Performance Low Potential Low Performance Medium Potential Low Performance High Potential for future success in more senior role 15

Emerging Potential High Valued Specialist Continue in current role Performance Low Emerging Specialist / Consistent Contributor Improve in current role Underperformer Questionable fit New role or end employment in 3 – 6 months Valued Contributor STAR – Top Talent Prepare for future role / promotion Misspent talent / At-risk Improve in current role Rising Star New to Role/Unrated Anticipate high performance and potential Low High Potential for future success 16 in more senior role

Talent Review Grid High Performance/ Med. Demonstrated Leadership Descriptor: Emerging Potential High Performance/ High Demonstrated Leadership Descriptor: Top Talent • Exceeds or Outstanding performance • Role model/SME in current function • Consistently delivers extraordinary results • The person could advance to the next level, but may not be mobile, lack desire to move up, and/or may need coaching in 1 or 2 critical areas • Exceeds or Outstanding performance • Role Model across the organization • Promotable now • Excellent people manager • Very best in all Leadership Characteristics Med. Performance Within Role Descriptor: Emerging Specialist/ Consistent Contributor Med. Performance/ Med. Demonstrated Leadership Descriptor: Valued Contributor Med. Performance/ High Demonstrated Leadership Descriptor: Rising Star • Meets performance expectations • Steady, consistently good performance • May not fit characteristics of leadership or management model pertaining to upward mobility • Not likely to move outside current role (e. g. , niche job, personal factors, full-time status, etc. ) • Meets performance expectations • Steady, consistently good performance • Capable of growing into a more complex role within the same level • Demonstrates many of the leadership characteristics • May be promotable outside of current level (laterally or upward) • Meets performance expectations • Steady, consistently good performance • In new/challenging role that may currently inhibit ability to exceed performance • Potential to grow into a role with much broader responsibilities • The person likely to advance to next level • Very best in leadership characteristics Poor Performance Within Role Descriptor: Under-Performer/Questionable Fit Low Performance/ Med. Demonstrated Leadership Descriptor: At Risk Unrated Performance/ Anticipated High Leadership Descriptor: New to Role • Does not meet/partially meets performance expectations • Does not meet Leadership Model criteria in most if not all areas • New team, new role, or new organization decision needs to be made • Does not meet/partially meets performance expectations • Inconsistent or disappointing performance in relation to leadership characteristics exhibited • Person may be new but isn’t adapting as well as anticipated • Too early to assess performance or competence… New to the role or the organization • Perceived to be able to take on greater responsibilities/roles and demonstrate all leadership characteristics • Anticipate strong, successful results High Performance Within Role Descriptor: Valued Specialist Performance - WHAT • Exceeds or Outstanding performance • Role model/SME in their current function • Not likely to move outside current role (e. g. , niche job, personal factors, no demonstration of leadership characteristics, etc. ) Potential - Leadership Characteristics -HOW

Talent Review Grid High Performance Within Role Descriptor: Valued Specialist Performance - WHAT • Exceeds expectations or outstanding performance • Role model/SME in their current function • Not likely to move outside current role (e. g. , niche job, personal factors, no demonstration of leadership characteristics, etc. ) High Performance/ Med. Demonstrated Leadership Descriptor: Emerging Potential High Performance/ High Demonstrated Leadership Descriptor: Top Talent • Exceeds or Outstanding performance • Role model/SME in current function • Consistently delivers extraordinary results • The person could advance to the next level, but may not be mobile, lack desire to move up, and/or may need coaching in 1 or 2 critical areas • Promotable now • Excellent people manager • Very best in all Leadership Characteristics Ready for • Exceeds or Outstanding performance next Step • Role Model across the organization Consistent Contributor 2 -5 Years to Next Step Med. Performance/ Med. Demonstrated Leadership (lateral or up) Descriptor: Valued Contributor Med. Performance/ High Demonstrated Leadership Descriptor: Rising Star • Meets performance expectations • Steady, consistently good performance • May not fit characteristics of leadership or management model pertaining to upward mobility • Not likely to move outside current role (e. g. , niche job, personal factors, full-time status, etc. ) • Meets performance expectations • Steady, consistently good performance • Capable of growing into a more complex role within the same level • Demonstrates many of the leadership characteristics • May be promotable outside of current level (laterally or upward) • Meets performance expectations • Steady, consistently good performance • In new/challenging role that may currently inhibit ability to exceed performance • Potential to grow into a role with much broader responsibilities • The person likely to advance to next level • Very best in leadership characteristics Poor Performance Within Role Descriptor: Under-Performer/Questionable Fit Low Performance/ Med. Demonstrated Leadership Descriptor: At Risk Unrated Performance/ Anticipated High Leadership Descriptor: New to Role • Does not meet/partially meets performance expectations • Does not meet Leadership Model criteria in most if not all areas • New team, new role, or new organization decision needs to be made • Does not meet/partially meets performance expectations • Inconsistent or disappointing performance in relation to leadership characteristics exhibited • Person may be new but isn’t adapting as well as anticipated • Too early to assess performance or competence… New to the role or the organization • Perceived to be able to take on greater responsibilities/roles and demonstrate all leadership characteristics • Anticipate strong, successful results Contribute Med. Performance Within Role In Role Descriptor: Emerging Specialist/ 1 -2 Years to Next Step (lateral or up) New (Six months or less) in the role Potential - Leadership Characteristics -HOW

Overview of the Performance/Potential Grid The Nine-Box Grid Why 1. It’s a simple and cost-effective way to assess any population on two important dimensions 2. It’s a great catalyst for robust dialogue 3. Used in a group setting, it promotes good open debate. The multiple perspectives provide for a much more accurate assessment 4. The process can facilitate a shared sense of ownership for the organizations talent pool 5. It’s a great way to identify development needs and transition to development planning 19

SUCCESSION PLANNING - Are you ready for this? What are the Gaps? • What are the gaps between what’s needed for each job and the current competencies of the team member. • What’s needed to move the talent to the next level? • Create the development plans for your Hi. Po and Hi Per staff members.

Talent Review Follow-up Plan Performance - WHAT Action: • Affirm their role model/SME function • Assess if could move outside of current role (e. g. , desire to move) Action: • Assess mobility • Further assessment on demonstrated leadership characteristics • Perhaps a coach if 1 or 2 potential areas are “derailers” • Communicate path… might influence mobility or desire to move. • Recognize the exceptional performance • Delineate next career possibilities Action: • Development plan and accelerated career path firmly in place. • Know their next two career steps. • Identify specifically when they will move and why • Celebrate with them and challenge them. They are our future! . Action: • Challenge to reach “Outstanding” • Assess if could move outside of current role (e. g. , desire to move) Action: • Confirm and document assessment of performance and demonstrated leadership characteristics • Plan to have person in new role or new company within 3 months Action: • Set clear and specific performance • Make a point to recognize criteria their specific, valued contributions • Assure person has tools, resources, • Action plan to ensure they are growing and information to be a success within their role/potentially outside of it • Delineate next career steps given that • Action plan for enhancing certain perf. criteria are met. demonstrated leadership characteristics Action: • 3 month performance plan • Ensure focus is on performance (e. g. , no extra teams or assignments) • Make sure person has tools/information/resources to be a success Action: • Set clear and specific performance criteria. • Ensure person has tools, resources, and information to be a success • Ensure successful on-boarding process Demonstrated Leadership Characteristics - HOW

SUCCESSION PLANNING - Are you ready for this? Develop the Talent Pipeline. • Build new skills • Development plans for targeted staff members • Transfer the knowledge

How do we get that knowledge?

Types of Knowledge • Explicit knowledge - Knowledge that has been articulated, captured, or codified –“Written down”. • Implicit knowledge - Knowledge that can be articulated or captured but has not been codified. • Tacit Knowledge is inside of peoples’ heads or in the “Brains of Employees”. It has not been captured, so it has not been formalized or organized. This knowledge can not be easily accessed by other employees.

How do we transfer the knowledge? KTM • Desk Manuals • Procedures • Documentation Explicit Knowledge • Formal • Structured • Unstructured Identify Knowledge Type Implicit Knowledge • Unstructured Tacit Knowledge • Informal • Unstructured • Personal Transfer • Training • Meetings • Cross Train KTM Capture and Codify KTM • Job Shadow • Interview • Mentor • Story-telling Knowledge Retained Transfer Face-to-face Individual and group

What’s needed for future success? Develop the talent pipeline Bench Strength Ready What are the gaps? Assess your talent

SUCCESSION PLANNING - Are you ready for this?

SUCCESSION PLANNING - Are you ready for this? ? ? ? Thanks!