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SuccessionManagement:IdentifyingandDevelopingLeadersDecember,2003Volume21,No.12BNA,Inc.123125thSt.,NWWashington,D.C.20037Telephone(202)452-4200©2003BYTHEBUREAUOFNATIONALAFFAIRS,INC.,WASHINGTON,D.C.WorkforceStrategiesBNA,Inc.123125thSt.,NWWashington,D.C.20037Telephone(202)452-4200©2003BYTHEBUREAUOFNATIONALAFFAIRS,INC.,WASHINGTON,D.C.WorkforceStrategiesSUCCESSIONMANAGEMENTTABLEOFCONTENTSCOPYRIGHT©2003BYTHEBUREAUOFNATIONALAFFAIRS,INC.,WASHINGTON,D.C.3ISSN1062-8991SUCCESSIONMANAGEMENTTABLEOFCONTENTSCOPYRIGHT©2003BYTHEBUREAUOFNATIONALAFFAIRS,INC.,WASHINGTON,D.C.3ISSN1062-8991THENEWSUCCESSIONMANAGEMENTSTRATEGY...................5IDENTIFYINGHIGH-POTENTIALEMPLOYEES........................15DEVELOPINGEMPLOYEESTOLEAD...............................17WHATDRIVESHIGHPOTENTIALEMPLOYEES.......................19ENSURINGDIVERSITYINTHESUCCESSIONPLAN...................21CASESTUDY:IBM...............................................23CASESTUDY:SOUTHWESTAIRLINES..............................29CASESTUDY:BOEING...........................................33RESOURCES...................................................354COPYRIGHT©2003BYTHEBUREAUOFNATIONALAFFAIRS,INC.,WASHINGTON,D.CISSN1062-8991WORKFORCESTRATEGIESWORKFORCESTRATEGIESPaulN.Wojcik,PresidentandChiefExecutiveOfficerGregoryC.McCaffery,ChiefOperatingOfficer,andEditor-in-ChiefDarrenMcKewen,ExecutiveEditorGailC.Moorstein,ManagingEditorBobCombs,CopyEditorSusanR.Hobbs,StaffEditorLindaMicco,StaffEditorWorkforceStrategies(ISSN1062-8991)isasupplementtoHumanResourcesReport.Commentsabouteditorialcontentshouldbedirectedtothemanagingeditor,telephone(202)452-4623.ForCustomerService,call800-372-1033orfax800-253-0332.CopyrightPolicy:AuthorizationtophotocopyselectedpagesforinternalorpersonaluseisgrantedprovidedthatappropriatefeesarepaidtoCopyrightClearanceCenter(978)750-8400,(202)452-4084(fax)orpermissions@bna.com(e-mail).Formoreinformation,see(202)452-4471.COPYRIGHT©2003BYTHEBUREAUOFNATIONALAFFAIRS,INC.,WASHINGTON,D.C.5ISSN1062-8991SUCCESSIONMANAGEMENT4COPYRIGHT©2003BYTHEBUREAUOFNATIONALAFFAIRS,INC.,WASHINGTON,D.CISSN1062-8991WORKFORCESTRATEGIESWORKFORCESTRATEGIESPaulN.Wojcik,PresidentandChiefExecutiveOfficerGregoryC.McCaffery,ChiefOperatingOfficer,andEditor-in-ChiefDarrenMcKewen,ExecutiveEditorGailC.Moorstein,ManagingEditorBobCombs,CopyEditorSusanR.Hobbs,StaffEditorLindaMicco,StaffEditorWorkforceStrategies(ISSN1062-8991)isasupplementtoHumanResourcesReport.Commentsabouteditorialcontentshouldbedirectedtothemanagingeditor,telephone(202)452-4623.ForCustomerService,call800-372-1033orfax800-253-0332.CopyrightPolicy:AuthorizationtophotocopyselectedpagesforinternalorpersonaluseisgrantedprovidedthatappropriatefeesarepaidtoCopyrightClearanceCenter(978)750-8400,(202)452-4084(fax)orpermissions@bna.com(e-mail).Formoreinformation,see(202)452-4471.COPYRIGHT©2003BYTHEBUREAUOFNATIONALAFFAIRS,INC.,WASHINGTON,D.C.5ISSN1062-8991SUCCESSIONMANAGEMENTTHENEWSUCCESSIONMANAGEMENTSTRATEGYSuccessionmanagement,asithaslongexisted,isdead.Today,smartorganizationsarecraftingcomprehensivesuccessionmanagementstrategies,identifyingtheirhighest-potentialemployees,andutilizingstretchassignmentstodevelopthemonthejob.High-potentialemployeesareplacedin“successionpools,”whichhaveassumedtheroleofyesterday’sreplacementplan-ningandcharts.Anddiversityinleadershipisseenasabusinessimperative.ReplacementPlanning:AThingofthePastInthepast,successionmanagementwasalong-termplanningexercisethatre-quiredorganizationstopredicttheirspecificleadershipneeds,andthenamesoftheindividualswhowouldfillthoseroles,asfaroutas15years,accordingtoPe-terCappelli,directoroftheCenterforHumanResourcesattheWhartonSchool,UniversityofPennsylvania.Companiesmappedoutindividuals’careerpaths,basedonassumptionsofpre-dictableadvancements,saidCappelli,whoisnowwritingabookonhowmoderncareersaremadeandmanaged.Now,companiescannolongeraccuratelypredictthepositions—ortheskillsets—theywillneedinfiveoreventwoyears,saidAudreyB.Smith,seniorvicepresidentofexecutivesolutionsatDevelopmentDimensionsInternational,aconsultingfirmbasedinBridgeville,Pa.Business,competitors,andthenatureofwhatisrequiredinexecutiverolesischangingtooquickly,addedSmith,whoalsocoauthoredGrowYourOwnLeaders(2002).“Theoldschoolisobsoletebecauseofthevelocityofchange,”Smithsaid.“Eventherolesarenotstableenough.”Also,employeesnolongerstaywithonecompanyforlife,andasindividualshoparoundtoenhancetheirresume,emptyslotsareleftinemployers’grandplans.AnewCEOusuallybringsinhisorherownexecutiveteam,andallthosedetailedsuccessionplansgettossedoutthewindow,Cappellipointedout.Notsurprisingly,astudybyHewittAssociatesfoundthatof300companiessur-veyed,only50percentsaidtheyactuallyusetheirsuccessionplanstoplaceseniorleaders.(HowCompaniesGrowGreatLeaders(September2003)).Cappellibeliev

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