Forecasting competencies for crucial positions in the organization will make succession planning easier.

Polish Up Your Crystal Ball

By Jennifer J. Salopek
The nuclear energy industry was in its heyday in the late 1970s until the 1979 Three Mile Island disaster occurred in Middletown, Pennsylvania. The partial meltdown of the nuclear power plant damaged the industrys image and caused public trust to plummet. For the next three decades, the industry was virtually frozen in time. That accident has scared away college graduates and entry-level employees and has created some human resources shortages for the Washington D.C.-based Nuclear Energy Institute (NEI), which is facing the potential retirement of up to 60 percent of its 138-member staff within the next five years. An improved public relations image has made recruitment and retention of staff critical to the future success of the organization.

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The relative dormancy of the industry generated very little enthusiasm among college graduates and entrylevel employees until very recently. Phyllis Rich, vice president and treasurer of NEI, says the organization is facing serious challenges in succession planning and knowledge retention, and both issues must be addressed to keep the organization effective and relevant. An important first step is defining competencies and improving NEIs forecasting ability to pave the way for more informed succession planning.

You can make forecasting as complicated as you want and can study it until the end of time. But if you make it too hard, people will lose concentration and interest.
Jeff Lesher, chief operating officer of Applied Knowledge Sciences

staff, mid-level managers, and directors. Focus groups are the crucial tool. For each selected role, a group of six people come together to work their way through a series of predetermined questions that are designed to uncover what competencies are necessary for the successful performance of that role. The six people are carefully selected to provide a 360-degree view of the role: two hold the position themselves, two are their direct reports, and two are their supervisors. Incumbents in each position contain and maintain a lot of specialized knowledge, says Rich. We must prepare for continuity. From a forecasting standpoint, the best thing our organization can do is talk about this issue at the management level. I try to keep our executives very engaged and continually bring the subject up.

Advice from the experts

Keeping executives attention on competency forecasting and succession planning is one of many best practices suggested by the experts. Here are more tips designed to help you polish up your forecasting skills: Decide on your competency philosophy. According to Bill Rothwell, professor of workforce education and development at Penn State University and author of several books on succession planning, you first must decide on your approach: Will you identify the key competitive differences of your business and drive them down, or will you look at each individuals talents and roll them up? Either way, Rothwell advises that you must take a qualitative approach and review talent on an annual basis. Too many companies rely on the legacy approach to hiring, a paternalistic view of keeping employees without the necessary skill sets, he says. In such organizations, new managers often inherit employees that show no match between competencies and the goals of the business. Acquire a global perspective. Educate yourself about future competency

The Core Competency Project

Competencies help organizations identify what they are looking for in future leaders, and help target selection, development, and retention strategies, says David Berke, senior program associate at the Center for Creative Leadership in San Diego. However, too many organizations make wish lists, rather than sitting down to figure out what competencies distinguish them from their competitors and make the organization successful. Rich and her colleagues at NEI are doing just that. Four years ago, the institute launched its Core Competency Project, a formal procedure to identify the competencies necessary for success in positions at three critical levels of the organization: administrative

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needs for the workforce as a whole, not just your business or industry, advises Kevin Oakes, CEO of the Institute for Corporate Productivity in Seattle. One resource Oakes recommends is O*Net Online, the website of the Occupational Information Network. The site includes a database containing information on hundreds of standardized and occupation-specific descriptors. Ask the people who know. Just as Rich is doing at the Nuclear Energy Institute, you must recognize that the employees who are currently doing the job are best prepared to tell you what it requires. Although they may not be able to create a list of competencies, they can provide descriptions that you can interpret. When working with clients on competency forecasting and succession planning projects, Jeff Lesher, chief operating officer of Applied Knowledge Sciences in Boyce, Virginia, a small group asks to describe a successful client engagement. You can make forecasting as complicated as you want and can study it until the end of time, Lesher says. But if you make it too hard, people will lose concentration and interest. The approach I typically take is to talk to the executive team or a small group thats been selected as company arbiters. We engage people in talking about what works and how they want to move the organization forward. Know what you already have. Most companies, while enthusiastically forecasting future competency needs, neglect to take stock of what they already have, says Oakes. Every organization should compile competency inventories. They take time to build and complete, but the process should begin at the recruiting stage. There is so much great information generated through hiring and selection that just goes out the window. That information should be recorded in an online database and

used to facilitate the performancemanagement process and to identify organizational competency gaps. Define competencies carefully. Create detailed competency definitions specific to your organization. Just specifying innovation or creativity isnt enough, says Lesher. Take each desired competency and spell out what that looks like in your organization. Dont rely on vague terms, but insist on specificity. For effective succession planning, you need that clarity. One example he gives involves Wal-Mart. The stores value proposition is, Always low pricesalways. So leadership competencies at Wal-Mart are defined within that context. For example, integrity might be demonstrated by being cost-conscious. You cannot say, Our employees must be this above all else, Lesher explains. Lack of context leads to inconsistent decision making. Think about varying degrees of competency. Two years ago, 80 percent of the leadership positions at Satyam Computer Services in Mumbai, India (a 2007 BEST Award winner), were filled from the outside, says Ed Cohen, senior vice president of the Satyam School of Leadership. The companys goal is to reverse that percentage, eventually recruiting 80 percent of its leaders from within the organization. One of the ways Satyam is working toward that goal is by reducing the number of levels within the organization from 17 to five and by defining the requirements for success at each level. Each position description includes required, desirable, and stretch competencies. Utilize the context of corporate strategy. As Lesher emphasizes, competencies cannot be vague, and they also cannot exist in a vacuum. In each competency description for each role, you must spell out how that competency is linked to strategy and execution, he says.

The Nuclear Energy Institutes Core Competency Project

Sample focus group questions
Describe a product or service provided by your organization to your members or constituents that exemplifies world class. What skills or knowledge are required to provide this product or service? What behaviors distinguish the more successful from the less successful administrators, managers, or directors in your organization? How do you typically spend your time? What are the primary challenges you will face in the next six to 12 months? What are some of the obstacles to meeting those challenges? Describe a problem you worked on that was resolved or handled successfully. What did you do? Why? What are some of the factors that can limit success for people in your position?

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Top 12 leadership competencies

1. Strategy development 2. Communication skills 3. Developing leaders 4. Hiring talent 5. Fostering creativity and innovation 6. Driving for results 7. Business knowledge 8. Role model for values 9. Business ethics 10. Industry knowledge 11. Building relations in the organization 12. Aligning organization with the market
Source: Leadership Development Survey 2005, by the Institute for Corporate Productivity.

Cohen agrees. Learning and development must partner with senior leadership to understand changes in how their customersand their customers customersbuy. This leads to the ability to predict the future in a sophisticated way, he says. Organizations need to focus specifically on their strategic plan or longrange vision. Where do they want to be positioned years from now? Then ask themselves what skill sets are required to deliver that vision. This requires bringing HR or whoever is responsible for competencies, succession planning, and so forth into the loop of that visiona common area where communication internally falls down, Oakes says. Educate line managers about competencies and their importance. The degree to which we can make good forecasts depends upon the line people, and our success depends upon how good they are at knowing their industry and formulating a strategy for success. HR plays a consulting role, says Donna McNamara, president of McNamara and Associates in Morristown, New Jersey. The job of workplace learning and performance professionals is to facilitate the process, pulling out important information from line managers, articulating it, and framing the discussion, says McNamara, who served as vice president for global education and training at Colgate-Palmolive. Oakes emphasizes that there are lots of resources available, including the research and publications of the Institute for Corporate Productivity, which partnered with the American Management Association in 2005 to identify the top 12 competencies for leaders. Use the information youve generated for effective succession planning. Once you have competency descriptions and forecasts, use them. Cohen and his colleagues at Satyam maintain what they call a ready now list, which is a list of corporate employees who are ready to move into a more senior

role. This readiness is based on the competencies defined for the role they would move into, not who is in line next, Cohen emphasizes. The list also cites employees who will be ready for more responsibility in six, 12, 18, and 24 months. Be realistic about your forecasting timeframe. The Nuclear Energy Institutes industry has changed dramatically in the past five years as nuclear power has evolved from pariah to a more responsible environmental actor. In formulating the Core Competency Project, Rich adopted a five-year timeframe. We tried to envision our organizational chart five years from now and then backed it out year by year. We are also working to bring in young, less experienced workers from the utility side who will be very experienced and ready in five years, she says. Rich also worked to elevate competency identification and development as a priority for the institutes people managers. She changed the incentive compensation program to include staff development requirements. To be eligible for bonuses, supervisors must report on how they developed the tiers below them. By maintaining an inventory of current competencies, consistently revisiting the conversation with executives, embracing strategic context, and putting some incentive behind competency forecasting, your organization can polish up its crystal ball and generate better information to fuel effective succession planning.T+D

Jennifer J. Salopek is a contributing editor to T+D; jjsalopek@cox.net.

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