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11. Support is available.

Pool members often need help understanding the scope and constraints of their new assignments. They also need doors opened, resources and money to apply or practice new skills, and, especially, time to attend training and implement projects. Because pool members meet with their manager to craft their Development Action Forms, they more likely will get the support they need. Either the manager commits to his or her responsibilities relative to the development plan, or the plan is changed. The system prevents pool members from making unrealistic plans. Usually the pool member's mentor also attends this meeting. The mentor provides additional insights and, most of all, applies subtle pressure on the manager to make any sacrifices that are necessary for the pool member's development (e.g., time off for training, special responsibilities, etc.).

Succession Management and Stock Prices

An Asia-Pacific telecommunications company was facing an uncertain future of converging technology, a deregulated marketplace, increased global competition, and increasing customer demands. Although it had a reputation for technical excellence, the company was considered to be highly bureaucratic, unresponsive to customers, and out of touch with the realities of modern telecommunications. In fact, the financial press was often critical of the company's performance and leadership and openly doubted that anyone in the organization had the capacity to take over when the current CEO retired. There was also a real threat that new competitors would very quickly erode market share and take the lead in the most profitable market segments. This would have put the company at the distinct competitive disadvantage of having to maintain a costly telecommunications infrastructure with high-cost/low-profit revenue streams.

Recognizing this very real threat to its future, the organization took a number of steps to improve its position by increasing its focus on regional expansion, improving customer service, and increasing its investment in emerging technologies. The senior team also recognized that the culture needed to change if the company was to cope with a more uncertain and turbulent marketplace. The company would have to improve the public's perception (especially the stock market perception) of its leaders' ability to drive the kind of sweeping change that was needed and the organization's ability to proactively tackle the issues facing it.

As part of their overall improvement strategy, the senior management team adopted a more strategic approach to developing executive bench strength. They contracted DDI to develop and manage an assessment program for middle and senior managers that reflected the corporate capabilities needed to succeed in the future marketplace they envisioned. The aim was to identify managers who could:

  • Thrive in this ambiguous and uncertain business environment.

  • Help others cope more effectively with change.

  • See the opportunities in the issues facing them and drive the business's future success.

DDI assessed 600 individuals and then provided feedback on participants' key strengths and development needs to participants and their managers. Participants then met with their manager and/or coach to construct development plans and review career/placement strategies. In addition, DDI presented group trend data and met with senior management to identify group development needs and implications for business performance.

For the high-potential managers, individual and group development strategies were then initiated to address development gaps, and then they were moved into key positions. Development strategies included traditional training and executive education, plus executive coaching and mentoring, targeted assignments within the company and other organizations (e.g., executives would be exchanged for a period of one to three years), action learning (e.g., a group of high-potential managers would take the role of the top team and be asked to address specific strategic issues), and project work aimed to stretch the individuals' experience and skill development.

Four years after starting the program, the results were visible on many fronts:

  • Despite greater global and regional competition, the organization was steadily growing in both revenue and profit.

  • The company became an early adapter of emerging telecommunication technology and, as result, was able to establish early market presence in a number of these areas (e.g., the Internet).

  • The company greatly improved its image within the marketplace. The financial press was more positive about the organization's performance and prospects, and the stock market remains very bullish about the company's future.

  • Perceptions of customer service levels, while still not where the company ideally would have wanted them, improved significantly. Despite heavy advertising campaigns, competitors' penetration into the company's traditional base was limited. Most important, the organization retained its share of the most profitable business segments.

  • When the CEO retired, the share price did not falter, which reflected both market and media confidence in the CEO's replacement.

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