Succession Planning and

Management: A Comparative
Study

by:
James Krantz
Marc Maltz
Cheryl Peppers

10/9/08

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Table of Contents

Page
Executive Summary ........................................... 2
Findings ........................................................................ 2
Themes......................................................................... 3
Implications .................................................................. 4

Comparative Features ..................................... 6

Financial Services Firms................................................ 6
Consulting Firms........................................................... 7
Other Companies.......................................................... 7

Interview Data ..................................................... 8

Introduction.................................................................. 8
Andersen Consulting .................................................... 9
Bankers Trust ............................................................... 11
Bristol Myers-Squibb .................................................... 13
Citicorp......................................................................... 15
JP Morgan..................................................................... 16
KPMG Peat Marwick ...................................................... 18
McKinsey & Company ................................................... 20
Merck & Co. .................................................................. 23
Motorola ....................................................................... 24
Paine Webber ............................................................... 27
Solomon Smith Barney ................................................. 28
Unilever ........................................................................ 30

Literature Review ........................................ 32

Bibliography ................................................. 37

TRIAD CONSULTING GROUP LLC ............................. 39

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Executive Summary

This benchmark study provides an overview of the succession planning and

management practices of 14 companies. It is intended to sharpen the
understanding of the choices some of our clients face as they consider
creating or enhancing their own systems for succession planning and
management. While questions and interest stemming from the financial
services industry have led to initiation of the study, the themes and
implications which emerged are relevant across industries.

Information about the practices of the 14 companies were obtained through

telephone interviews. The interviews were conducted with company
personnel (mostly from human resource departments) who had either direct
knowledge or were responsible for managing these processes in their
respective companies. The firms interviewed were:

Finance Professional Other

Services Com panies
Bankers Trust Andersen Bristol Myers-
Consulting Squibb
Citicorp Deloitte & Touche Merck
Paine Webber KPMG Peat Motorola
Marwick
JP Morgan McKinsey & Unilever
Company
Merrill Lynch
Morgan Stanley
Solomon Smith
Barney

Findings

Nearly all organizations have some sort of succession planning or

management system with varying degrees of formality, sophistication and
development. These systems range from those that build “bench strength”
to those that concentrate on “slating” -- ensuring that replacements are
prepared for specific role. Of those interviewed from organizations that did
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not have a formal process in place, all expressed a desire to develop such a
system, and most indicated a recognition that addressing issues of
succession has become a standard practice across their industry and a key
issue within their company.

Among the companies surveyed, the greatest differences were in the types
of systems in place and the underlying goals upon which they are
constructed. Many organizations have developed elaborate and highly
articulated systems oriented toward slating and developing candidates for
important positions. Others focus almost exclusively on developing bench
strength by identifying a pool of high potential candidates and investing in
their growth. Often, organizations attempted to define hybrid systems that
addressed both purposes.
In highly turbulent settings, it is extremely difficult to establish replacement
systems based on the slating approach, since the definition of roles and
structures fluctuates so rapidly. Recently published articles point to two
clear examples of the impact this turbulence has on an organization’s ability
to plan for leadership succession -- the lack of senior leadership at Citicorp
and AT&T and the difficulty in holding onto and finding appropriate internal
candidates led both companies to radically alter its leadership landscape, the
first by merging with an organizaiton that has substantial leadership talent
(though we do not mean to imply that this was the sole reason for this
endeavour) and the second by hiring a substantial talent from outside of the
organization’s management ranks (a first for AT&T).

Among those organizations that were identifying and investing in high

potential candidates, the criteria by which people were chosen varied
considerably. In many cases, the system was linked to some leadership
criteria, such as competency and/or value models that were felt to
represent the future requirements of successful leadership in their
respective systems. In two cases, the planning process was explicitly linked
to the strategic concern of the kind of people likely to be needed to ensure
the successful execution of future strategic directions.

Themes

Several additional themes stand out from the data set:

1. Role of Hum an Resources

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 The relationship between human resources (HR) and the business units
appears to have a major impact on the ultimate program. When HR
manages or dominates the program, there is a tendency toward over
bureaucratization, rigidity and a sense of disconnection from business
reality. When the business units are the sole managers of the program
there is a tendency toward haphazardness, inconsistency and diffuse
focus. The most robust programs arise out of a genuine partnership
between HR and the business units.

2. Criteria for Identifying High Potential Candidates

For succession planning systems to be credible, reasonably objective, and
distinct from the basic promotional/advancement process, the choice of
high potential candidates needs to be based on some criteria that has
meaning in the business context. The range of criteria used is great,
including: competency analyses, guiding values, leadership principles, and
performance models.

3. Does Succession Planning = the Prom otional Process?

Several organizations indicated that the succession planning system was
identical to the promotional process and, therefore, that the pool of
potential candidates was made up of all professionals or managers.
Others have developed succession planning practices that ensures the
availability of a pool of candidates with skills and talents suited to
particular high-risk positions. In some cases, organizations simply
identify existing “high-risk” positions; in others, they anticipate future
needs for skills and capabilities.

4. W hat Is the Relationship Betw een Perform ance and Potential?

Many firms assume that current performance is the best predictor of
future potential. Others suggest that the skills, values and orientations
that lead to achievement in current roles may not be as suited to the
requirements of other roles, particularly as the “managerial component”
of roles develops and becomes more complex. Also, some who achieve
in highly technical or focused roles may not do as well in roles requiring
broader focus or less technical proficiency.

5. Back-up / Replacem ent or Developm ent of a Pool?

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 For those organizations with career planning processes, there is a basic
distinction between those who slate one or more candidates for each
“high risk” position and those who are trying to develop a pool of
candidates (i.e. bench strength) that will be suited to future demands,
independent of specific roles.

Implications

Succession planning and management systems clearly provide companies

with methods for developing certain aspects of the leadership it requires to
remain competitive and for managing risk. In the financial community,
succession planning has moderate success and has suffered from either a
lack of attention or too much bureaucratic detail. Whether within or outside
the financial services industry, the findings of the study yield several
diagnostic factors and design principles for determining appropriate
Succession Planning and Management systems. We recommend that
companies take these factors and principles into account when considering
their approach to Succession Planning and Management, whether initiating
the design of a new system or evaluating an existing one.

1. Diagnostic factors
Diagnostic factors for consideration of a succession planning and
management system should include:

a. Managing Operational Risk -- Managing the inherent risks

associated with increasing organizational spans of control, larger sums
of business throughput, and increasingly complex and turbulent
market conditions. Are current risk management processes directed
at enabling only the technical and operational aspects of the business
in response to the turbulence, or do they also include the required
resource management, formal decision making processes, and
leadership clarity?

b. Strategic Leadership Developm ent And Assignm ent -- The

process for identifying key future leaders and providing them with the
kind of assignments and experiences that ensure their successful
development. Are current leadership development processes linked
with an understanding of the future needs of the organization, and
are they formally tied to other dependent systems, such as

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 performance review, management development, and strategic
planning?

2. Design Principles
Effective Succession Planning and Management systems have the
following features:

a. An Established Succession Planning/Managem ent Process --

These processes are critical to the life of most organizations today,
directly impacting their continuity in the marketplace and their future
competitiveness.

b. Sim plicity -- Those companies that have developed cumbersome

processes are suffering more than gaining from their system.

c. Business Unit and Hum an Resource Partnership -- The most

successful systems are those created by both the business unit and
the human resource department, allowing both the needs of the
business and the expertise in human resource management to be
appropriately joined.

d. A M odel of Com petency -- A model of competency for

management (that addresses all levels of management) provides
people with a developmental guide and a clear understanding of their
functional role expectations.

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Succession Planning and Management
Practices: Comparative Features

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Succession Planning and Management
Practices: Comparative Features continued

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 Interview Data

Introduction

The decision to include interview data in this report is prompted by the:

1. Richness of material within the interviews themselves, and

2. Recognition that readers may want more specific information on a

particular company than what is available in the “Succession Planning and
Management Practices: Comparative Features” matrix.

In most cases, the data was provided by a single key informant within the
organization who had direct knowledge of and/or responsibility for these
processes. The interview responses have been summarized for the most
part, allowing for more detail and for some quotations where appropriate.

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Andersen Consulting

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1. Description of Informal career planning system: “We know who [the
career candidates] are and they get moved up on the basis of
planning/manag performance and potential.” More formal management
ement system. development system includes core training curriculum through
partner level and performance management based on
leadership at the project.
2. How extensive is Key leadership positions and management development
the system? process reach across all market units and competency groups.
(100% of professional staff and 85% - 90% of workforce)
3. Are high-risk 300 senior partners represent key positions targeted
positions
identified and, if
so, how?
4. How are the Annual performance review.
occupants of
high-risk
positions
assessed?
5. Are critical Candidates for partnership move forward on the basis of skills
competencies they are demonstrating, and they are matched with criteria
defined and required for certain leadership positions, but the latter is not
assessed? formalized. Partners are recognized for having/not certain
skills, rather than a match of skills for certain positions.
6. Are high While all mangers are included in the management
potential development efforts, only partners are considered as
candidates candidates for the 300 key leadership positions. There are
designated and, 1100 partners, representing approximately 2.2% of the total
if so, how? manager group. Candidates are identified the same way that
they become partners: targeted based on unit award process
– assessment of their contribution to the practice (sales,
administration, managing consulting projects) – and key
characteristics required of leaders managing the business.
7. If candidates are Open process. Anyone can see growth of units which is a key
selected, how is indication of performance. Best strength comes from these in
this the partnership pool. Every partner has potential and
differentiation sometimes “their number just isn’t up yet to manage a
managed? particular segment.” Some want to grow; they get careful
counseling. “One just became managing partner of a huge
segment after 15 years as partner.”
8. How are future “They’re self-starters and self-motivated. They work with
leaders senior partners on biggest jobs so they’re aligned with senior
developed? leaders who are already in the positions targeted; natural
grooming process in place that emphasizes mentoring.”
Training is looser, we have some training, but development is

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 more related to mentoring.” Succession is into key positions
largely based on performance in client environments.
Leadership on project teams translates into leadership
capability in the firm.
9. Is the career Formal partnership process is directly linked, through partner
planning/manag evaluation system, all the way through – performance
ement system management, compensation, recruiting and selection,
linked to other management development. Career path development is
HR systems? thought about but not for specific leadership positions and
not in terms of the 300 managing partner positions. There
are positions for people to move into in order to further their
growth. Skill development and growth in firm is taken into
account, but the senior positions are not considered in this
regard.
10.Other
comments/note
s.
Bankers Trust

1. Description of Senior executives develop succession plans for their positions

career annually. High potential candidates are provided special
planning/manage developmental support. Goal is to ensure that Bankers Trust
ment system. builds bench strength and motivates future bench strength.
Each year the top 150 - 200 people are asked to develop
succession plans for their positions. 50 people are selected as
high potential candidates and provided special developmental
support
2. How extensive is Applies to top 150 - 200 people out of 20,000 worldwide.
the system? Applies to all businesses.
3. Are high-risk The CEO, 19 additional people on management committee and
positions their direct reports are considered critical.
identified and, if
so, how?
4. How are the Each manager assesses their subordinates, rating incumbent in
occupants of terms of their performance. Replacement candidates are given
high-risk a time frame in terms of when they’ll be ready, i.e. long, short,
positions immediate.
assessed?
5. Are critical Developing a framework, similar to competencies, called the
competencies Senior Management Model. Though still of validating the
defined and model, it is now be used to identify and give feedback to high
assessed? potential population.

The model was developed from a customized 360o instrument

and a lot of individual interviews. Benchmarked against

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 externals by outside consultant.
6. Are high 50 worldwide high potential (HIPO) people have been chosen.
potential Each goes to 2.5 day training, participates in a 360o feedback
candidates process, and receives an external coach. A development plan
designated and, approved by the management committee sponsor (internal
if so, how? coach) is developed and reinforced through meetings with
head of HR.

The Management Committee has a regular “emerging leader”

discussion to review their progress.

The group of 50 are either partners hoping to join business

council or management committee or they are about to
become partners.
7. If candidates are BT tries to use HIPO’s as successor pools but because of
selected, how is technical skills involved in so many of the businesses people
this must sometimes be found outside of the HIPO pool.
differentiation
managed? Those not chosen as HIPOs don’t know about it so that the
system would not be de-motivating. Management Committee
members know who the HIPOs are; emerging leaders know
about it the system and that they have been chosen.

Some have chosen not to be on it. Some see it as “a pain”

because it takes them away from the business. Very low
profile program.
8. How are future Noel Tichy’s Leaders Developing Leaders program – a 2 day
leaders program designed to give a conceptual framework around
developed? leadership. It asks questions such as: “Given your strategy,
what values do you and your people need?” “What is
emotional edge required?” “How to use strategy to get best
ROE?”

While this has been for senior people it is being moved to

middle managers this year.
9. Is the career 1. All businesses develop strategy in Sept. They then review
planning/manage the strategy and tell HR what the likely future organization
ment system chart will be, including who the incumbents are and their likely
linked to other successors. Then performance, diversity, anyone at risk, etc.
HR systems? are looked at.

2. A customized form is developed to look at statistics in

each business. Who are new key people coming in? Who are
key people who have left and are we losing those we want to?
What are the costs from ex-pat perspective? It also asks
(based on behavioral anchors) whether managers are
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 motivating staff and providing a good ambience. The form
asks them to rate the organization on these dimensions.

3. Then managers look at the information, talk about

strengths and weaknesses from people perspective and
develop action plans.
Also have HIPO population tied into it by asking them to
identify future leaders of the organization that are currently
managing complexity in ambiguous worlds who, if developed
appropriately, can reach top tier of management in 3-5 years.
10. Other
comments/notes
.

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Bristol Myers–Squibb

1. Description of A program of evaluating, assessing and managing the careers

career of the top 600 to 1000 managers in the company. Two
planning/manage analyses are maintianed:
ment system. Gold Book – The top 100 mangers in the company
Silver Book – The next 500 manages in the firm.

Each book contains a management profile of the individual,

their mobility, career and development needs and the
position(s) that they have been identified as potentially filling.
2. How extensive is 100% of management; the top 3 of 5 levels in all units.
the system?
3. Are high-risk All management positions level 3 and above are considered
positions key. For each division head two people are identified as
identified and, if potential backup, with each candidate’s career development
so, how? mapped to the position they are being groomed for.
4. How are the Annual performance review.
occupants of
high-risk
positions
assessed?
5. Are critical In the evaluation process and in the manager’s development
competencies plan against competencies that have been benchmarked and
defined and are reviewed annually.
assessed?
6. Are high All managers are part of the pool but only certain people are
potential designated – “a weeding of those is in and who is out” in the
candidates management ranks. Approximately 20% to 30% of the
designated and, management are in the pool for consideration. They are
if so, how? identified by the direct management and then further
discussion occurs quarterly and annually amongst senior
management. The CEO and the board actually review the
“Gold Book” at least once a year. The CEO used to review the
“Gold Book” quarterly. The HR heads of each division play a
crucial role in managing and administering the system.
7. If candidates are While It is a transparent system in that the guidelines are
selected, how is published, only top management and HR are informed about
this who gets included in “Book” Eventually a manager finds out
differentiation but this is more informal than formal.
managed?
8. How are future Managers are developed in a comprehensive training program
leaders that is both internally and externally derived. Management
developed? assignments vary depending on the development “need.” For
example, a “second” in charge of some aspect of

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 manufacturing in a division in Illinois might be sent to Europe
for a two year assignment in marketing. BMS has an extensive
training program and a training and development
infrastructure.
9. Is the career The management review process is not directly linked to the
planning/manage annual review and developmental process. It is experienced
ment system and is managed as a build-on but distinct from the other
linked to other processes.
HR systems?
10. Other The system has functioned well for many years in ensuring the
comments/note development and succession of key positions within the
s. company. It has also served as a mechanism to further
develop global leaders in distinct business areas.
Citicorp

1. Description of A formal process initiated yearly in which all management are

career tracked across the organization. Quite stringent and
planning/manage regimented. Extensive program in which managers are
ment system. identified and evaluated by two sets of criteria – performance
evaluation and an HR assessment of the individual against
predetermined criteria for each position.
2. How extensive is Top four levels of each division – 1000 managers of the firm –
the system? go through the process. About 1% to 2% of the firm as-a-
whole; 100% of units.
3. Are high-risk Top 1000 positions included in the career planning system are
positions considered high-risk positions.
identified and, if
so, how?
4. How are the Each person goes through an annual (sometimes twice yearly)
occupants of evaluation. The firm also performs a yearly manpower review
high-risk in which John Reed and the HR head assess the top three to
positions four executives in each division.
assessed?
5. Are critical For Most. Used as a tool for evaluation, career path
competencies development and as a way to identify successors for positions.
defined and Also used in grooming next management for key positions.
assessed?
6. Are high All managers are candidates (about 1000 managers).
potential
candidates
designated and,
if so, how?
7. If candidates are A well known and publicized process that has become overly
selected, how is bureaucratized: “Many managers dislike the system while HR
this seems to hold onto it. Most hate the system. Placements

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 differentiation resulting from the system seem odd to most.”
managed?
8. How are future Competency analysis, rotational assignments, and formal
leaders leadership training.
developed?
There is also a leadership development program that varies by
level of the firm.

Citicorp has career development model that looks at skills

across business units and addresses particular models for
behavior in each position
9. Is the career Directly linked to performance development, career
planning/manage development, management development, position selection.
ment system
linked to other
HR systems?
10.Other Succession Planning should be a venue for a conversation. In
comments/note this system the discussions are time consuming – lengthy –
s. and the system has a cumbersome bureaucracy. It is mainly
controlled by Reed and the head of HR.

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JP Morgan

1. Description of Management teams meet to prepare for senior meeting by

career identifying key leadership candidates, skills, and refining
planning/manage development plans on the unit level. Next there is a meeting
ment system. of the most senior people in the firm that focuses on people
issues around achieving their plan – skills, gaps, assessment of
team, individual situations, progress from last year – and have
them focus on leadership bench and talent pool (incl.diversity
pool). Chairman oversees the integrative level, which leads to
a written “scorecard” output. Finally, there is a Board Meeting
on succession planning in June. Chairman talks about
leadership & skills issue about the 15 most senior most
people.
2. How extensive is Applies to all senior people in each unit.
the system?
3. Are high-risk One day “house arrest” meeting discusses successors to that
positions group and to the next layer down. The discussion is not
identified and, if positionally driven, it is development driven. Discussing the
so, how? skills and gaps of team implicitly addresses issues of depth of
bench for one job or shortage of potential candidates for
another. Positions are not reviewed name by name, except
where people are getting overused as potential successor and
it is unlikely that they will be available then questions of
highest and best use will be raised. Succession templates are
not focus, resources & gaps are. Emphasis is on array of skills
and abilities present on team.
4. How are the Board assesses top tier; CEO assesses next layer down.
occupants of
key positions
assessed?
5. Are critical Only in a superficial sense. It is a competency based
competencies discussion, but no formal competency process exists.
defined and
assessed?
6. Are high Certain people have been identified and certain messages in
potential terms of general recognition were conveyed to them: “You
candidates were discussed in a number of places as being an important
designated and, candidate and in order to get you there we’d like you to do x,
if so, how? y, & z” No promises are made, nor has everyone been
spoken to – spoken to most likely successors where there is
unanimity. “In effect, they are messages from the chairman.”
7. If candidates are Not publically apparent. Some knowledge exists about the
selected, how is process – public statements are made about succession
this planning, but no specifics or individuals are named.

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 differentiation
managed?
8. How are future There are a variety of tools available including coaching with
leaders executive coach from outside, training (i.e. public speaking or
developed? diversity or specific skill), mentoring, stretch assignments,
cross functional assignment (i.e. assigned to MD, steering, or
firm-wide diversity committee) to give further exposure, or
inviting people to certain meetings. It depends on gaps
identified and is based on a targeted, individualized approach.
Management team and HR creates development plan together
with the individual. HR would be combination of generalist and
development specialist. HR keeps a list of on-going cross-
functional projects and initiatives that people could serve on
for developmental purposes. For all managers JP Morgan has
leadership development courses geared to either individual
contributor, team, or manager level. Coaching is available to
senior people and high potential people just below them.
Other tools are available, depending on need, i.e.getting to
know new team or helping in new leadership position.
9. Is the career Not direct link to compensation. Strongly linked to
planning/manage performance management, since same skills, etc, are focus of
ment system both. Efforts are made to reinforce what people have been
linked to other told in yearly performance review. Career Path: Difficult to
HR systems? map out. Senior people receive some “directional” coaching:
“you can tell them what kind of business is likely to utilize
their highest value.” Indications of where their greatest
opportunities are seen is sometimes provided. Senior people
have all had 360 degree feedback
10. Other Board keeps consistent tab on team assessments of skills,
comments/note gaps, individual assessments and succession plans. The effort
s. is to move away from positionally driven system to one that
focuses on skills and needs of teams.

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KPMG Peat Marwick

1. Description of No real system at this time, key focus of leadership is

career partnership. Progression is organized around the partnership
planning/manage decision process. Trying to get the business units to
ment system. introduce traditional succession planning. This format focuses
on questions such as: “Who is ready now, who will be ready in
a year, where are they going, etc.?” Our objective is to
institutionalize succession planning that can be distilled across
lines-of-business and then perhaps be able to formalize and
manage it.
2. How extensive is All partners and potential partners are consider potential
the system? leaders. Number of new partners is determined on an annual
business projection.
3. Are high-risk KPMG considers whether positions are anchor positions, that
positions need an incumbent for a period of time, or pass through
identified and, if positions that can be used for growing talent. Everyone has
so, how? some management responsibility – KPMG effort is to
acknowledge that reality. Analysis around “black holes” –
those who aren’t here as well as those who are. Same
individuals are sometimes identified for 3 jobs, with nothing
behind.
4. How are the In terms of performance, not potential.
occupants of
high-risk
positions
assessed?
5. Are critical Yes, however we try to preserve a place for intuition and
competencies judgement, avoiding the tendency to be overly rigid or treat
defined and competencies as a “precise science.”
assessed?
6. Are high All consultants aiming for partnership are candidates. No
potential formal list of candidates is developed but “because it is a
candidates relationship oriented environment, you only have to speak to a
designated and, few people and suddenly you have a pool of people – there is
if so, how? general agreement on perceived capability of others.”
7. If candidates are For those who “don’t get through the screens,” there is some
selected, how is fallout. “Sometimes what we’re looking for in a partner is
this different than what we are looking for in highly valued
differentiation employees.” Increasingly for partnership, people with broad
managed? commercial knowledge are sought out. For those with a much
narrower but deeper focus KPM is trying to develop other
mechanisms to satisfy them. Starting using term Director and
other ways, and KPMG does not “discriminate” in terms of
remuneration “even if they do not have the title.”

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8. How are future About 2 years before the partnership decision, prospective
leaders partners go through development center that consists of 2
developed? days of group/individual activities, psychometric tests, and
other learning experiences. A report is then developed,
followed by a development plan to discuss, and work with, the
individual over time. Those still improving, and considered
suitable, are sent to the assessment center. In this 2 day
program they are assessed against a set of competencies
based on different business situations by senior partner
assessors. Typically this occurs in Oct/Nov, with the
partnership decision happening in June for appointment in
October The assessment process highlights areas of
improvement, and leads to personal cases, written
documentation about individuals. Business cases are also
developed which determine how many partners will be needed
in the future. Those whose personal cases match business
cases sit before interview panel with three senior partners.
Those successful appointed in October. Also, KPMG has a
broad partner base, many of whom were appointed against a
different set of criteria. There is a need to refresh them with
leadership development activities. That works, in KPMG
context, on behavioral change.
9. Is the career Links are to recruitment and selection. Do not want it too
planning/manage closely linked to performance assessment. “Potential is not
ment system nearly as closely correlated to performance as is often
linked to other believed. Outstanding performers don’t necessary have
HR systems? outstanding potential.”
10. Other Gradually people understand that the line groups must identify
comments/note potential candidates. Leaving it in the hands of HR is a recipe
s. for failure.

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McKinsey & Company

1. Description of No real succession planning system, efforts focus instead on

career making effective replacement decisions when key positions
planning/manage open up.
ment system.
1. Replacement planning is mostly done by DRC (Directors
Review Committee that includes 16 Directors and the firm’s
Managing Director) which meets with all 200 Directors to
evaluate performance, get input from each Director about
leadership opportunities in the firm and about what they
would like to do.

2. DRC meets to review all leadership positions in firm and

catalogue when someone will be needed for every key
leadership position in the firm, reviewing all directors and all
open positions.

a. DRC members identify individuals, based on what they have

heard from other directors, e.g.Principal Review Committee.
Then the DRC conducts a confidential vote.

b. Decisions are not final because Managing Director has the

power to appoint any one of those positions. But the MD
gets all the information and then he makes the decision.
Only rarely ignores the vote, but does not have to say why
if he does.
2. How extensive is Replacement system covers all 40 geographical units, 20-25
the system? industry sectors, 30-40 personnel committees, plus a few
more committees (across 100% workforce). General
management development efforts includes all engagement
managers and above. Every professional (4000) is in the
firm’s ‘up or out’ philosophy, resulting in annual turnover of
around 22%.
3. Are high-risk High-risk positions are defined as: office manager, industry
positions leaders and personnel committee positions as well as some
identified and, if governance committee (monitor conflict situations)
so, how? membership positions. 120 key positions are targeted.
Succession planning is the process for filling those 120 key
leadership positions for which all directors are eligible. Each
year about 25 such positions will be replaced. 200 Directors
comprise the pool of candidates. Nearly all are filled by
Directors, but sometimes outstanding Principals are appointed
to these leadership positions.
4. How are the DRC performs reviews of Directors annually. Members of the

Page 23
August 20, 1998
 occupants of DRC are evaluated by other members of the DRC.
high-risk Performance review process uses a 5-part leadership model.
positions “Performance reviews drive the process, they’re thorough. So
assessed? the succession planning is tied to that, but the performance
review is so thorough, that it’s not an issue. It does not need
to be formal.” People in leadership positions are rarely
removed, maybe 10%. “In 60% of cases, someone is just
tired and wants to be removed.”
5. Are critical Not formally for those positions, no specific written
competencies competency anywhere for those leadership roles. McKinsey
defined and also has a leadership model, developed in consultation with
assessed? partners and clients. However, members of the DRC are
“intuitively aware of specific competencies. They’re implicit,
that everyone can articulate – industry expertise, client skills,
collaborative in the firm.” The DRC might review/assess
competencies every three or four years, (eg. Leadership
definition has changed– more emphasis placed on being able to
find best talent in the firm and in bringing McKinsey to the
client – internal networking-leadership). In terms of general
management development, the firm ’regenerates’ about every
5-7 years and regularly assesses whether its system produces
the right caliber/type of people.
6. Are high For replacement of key positions, process is identical for
potential election to partnership. For general management development
candidates and career advancement, all professionals receive performance
designated and, reviews (completed after every project by the engagement
if so, how? manager) that are synthesized by a designated ‘development
group leader’ (DGL). DGL advocates candidates at appropriate
committee and committee decides whether to promote, hold
or ask to leave.
7. If candidates are Information is open and known at Director level. McKinsey’s
selected, how is effort is to focus on constant and on-going feedback. For the
this entire professional staff, those who leave are considered
differentiation valued members of the McKinsey community. When people
managed? leave the firm this process is managed to be as ‘win–win’ as
possible. Alumni of McKinsey is a highly managed and
successful marketing and networking mechanism for
consultants and alumni alike.
8. How are future For all leaders, the life cycle approach is delivered in staged
leaders programs, with global audiences in key role transitions that
developed? amount to ‘rites of passage’ to key roles, such as becoming an
Engagement Manager. Firm-wide role change programs
focuses on personal development as well as skill-building.
Everyone has a formal DGL and is encouraged to find multiple
mentors. Formal training, informal mentoring, and evaluation
process are available. Excellent technical training exists,
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August 20, 1998
 although no training available that teaches people how to be a
leader outside the client setting. Discussions are underway to
develop leadership training for in-house leadership roles. Little
training available on how to be a successful general leader,
such as an office manager. Existing programs are similar in
that they build on the same model of leadership, most are
heavily experiential and are delivered with a mix of internal and
external faculty. All programs are “owned” by specific
Partners and have a heavy celebratory element.
9. Is the career McKinsey has a leadership model, developed in consultation
planning/manage with partners and clients that is ‘cascaded’ throughout the
ment system development system, and is reflected in performance criteria,
linked to other development program curricula, and compensation.
HR systems? Recruiting & selecting: “the ideal is to tie it, but we’re inclined
to hire people that are good analysts and problem solvers and
McKinsey is willing to dismiss absence of softer skills.
Management development occurs in projects, on client site.”
10. Other Previously, they had made both the performance review and
comments/notes partner selection processes transparent in the organization.
. However, the partner selection process has suffered. As a
result, they felt that the transparency of the partner selection
process had limited the ability of the organization to be
honest, forthright, and so on. Now the partner selection
process is secretive again. The performance review process
remains open.
Merck & Co.

1. Description of Each division President meets with direct reports to discuss

career possible replacements. Then each division President meets
planning/manage with the CEO to discuss replacement candidates for their
ment system. positions. Formal documentation maintained by division
Presidents, CEO and respective HR business partner.
2. How extensive is 100% of organization.
the system?
3. Are high-risk Management Committee (CEO, Division Presidents, their direct
positions reports) and other positions selected because they are felt to
identified and, if be critical. About 150 positions
so, how?
4. How are the Annual performance appraisal. Candidates are assessed
occupants of key according to on-going business performance and their
positions leadership skills in accordance with Merck’s “Leadership
assessed? Principles.”
5. Are critical “Leadership Principles,” developed by the management
competencies committee, principles define how Merck “wants to do
defined and business.” No formal competencies articulated.

Page 25
August 20, 1998
 assessed?
6. Are high Specific managers are targeted for each of the positions. No
potential number is prescribed; it is in part to determine how many
candidates candidates are available.
designated and,
if so, how?
7. If candidates are People don’t know.
selected, how is
this
differentiation
managed?
8. How are future Each individual has a customized development plan. Well
leaders established training program that varies by level.
developed?
9. Is the career Though no formal linkages are made, effort is made to have
planning/manage Merck’s “Leadership Principles” drive all of HR programs. All
ment system employees are evaluated not only on results but how they
linked to other have achieved them through these principles. To extent that
HR systems? our leadership principles driving all of our HR programs.
10. Other
comments/notes
.

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August 20, 1998
Motorola

1. Description of In succession planning program, back-ups are identified for all

career division level positions and talent pools are identified. The key
planning/manage issue is “rare talent.” Areas that will need greater talent pools
ment system. in 5 years are identified in order to execute strategies not yet
defined. Questions in succession planning include: “do we
have the flow of talent to staff the organizational structure
that will be needed in 5 years in order to execute strategies
not yet defined? Areas where talent will be needed in 5 years
are addressed. Unlike oil companies where structure doesn’t
change much, ours changes a lot.” Reviews conducted twice
yearly.
2. How extensive is Across all 5 sectors (100% of exempt workforce) In some
the system? sectors, succession planning includes non-exempt workforce.
Not required, but has permeated because it “pays off” for the
operating management.
3. Are high-risk Key positions identified are: division general manager
positions positions and above. For every division level position and
identified and, if above back-ups and a talent pool are identified. Each position
so, how? screened in terms of the criticality of the position and degree
to which talent is available. Motorola focuses on areas where
talent pool is likely to be inadequate.
4. How are the Everyone in high-risk positions is assessed in terms of current
occupants of and relative performance, current and relative potential and in
high-risk terms of their ability to execute current strategies and the
positions probable strategies of the future.
assessed?
5. Are critical Competencies generally not considered useful and not used
competencies per se. More relevant is whether the results needed in the
defined and future circumstance can be defined.. For example, for GM
assessed? positions certain factors are defined. Most people in the talent
flow look good against those competencies so it does not help
much in terms of developmental needs. No specific set of
competencies for specific positions -- leadership is a third of
the factors, management a third and others are strategy-
related factors.
6. Are high Initially 100 % of total manager group is targeted.
potential Conceptually, each manager considered high potential when
candidates hired. Only when they demonstrate they do not have high
designated and, potential are they dropped out of the pool, i.e. would stay at
if so, how? that level. Motorola’s definition of high potential (most
pragmatic definition, not universal across Motorola): if a
person is estimated to have 50% or greater chance of losing 2
organizational echelons in remainder of their career. (“In my

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August 20, 1998
 case, for example – If I lost 2 echelons, I’d be Chair of Board.
Not realistic, at my level and tenure, no matter how well I
perform in my current role. So I’m dropped from the list of
targeted candidates.”) “The real question is: should a
particular person be moving into another position quickly? Can
we do better, should we do better? If there’s no potential at
all to do more, theoretically you might argue that they don’t
belong in the organization; but the reality is you can’t get
anyone better.” Motorola’s goal is to focus less on targeting
individuals and focus more on targeting organizational needs –
to staff the organization of the future and to meet the needs
of the organizations. This analysis begins not with managers
but with the positions, the need to get certain types of work
done, and the need for rare skills.
7. If candidates are Motorola’s core values include respect for individual and
selected, how is integrity. Not being designated as high potential does not
this prevent anyone from improving the system overall.
differentiation
managed?
8. How are future It is not Motorola’s obligation to ensure anyone’s success; it is
leaders the obligation of each employee. Motorola provides
developed? developmental opportunities and makes sure people
understand it is their obligation to participate in a plan. HR
responds to requests for help to be in a better competitive
position for future positions. Those identified as an “Emerging
Leaders” (Motorola’s term for “High Potential”) and their
managers are encouraged to work together on a
developmental plan, with manager as a resource, that captures
strengths, developmental needs, actions, resources,
commitments. General management training is extensive and
stratified. It includes a development program for VP’s generic
needs; an intensive program for those with highest potential at
sector level (120 people are put through this each year in 3
groupings); a week-long Advanced Leadership Academy for all
sector leaders; and a Leadership Institute for people assigned
to their first supervisory position. 1000 people per year go
through leadership training programs. (Every Motorola
employee has 40 hours per year designated for training.)
9. Is the career Career path development: No, Motorola cannot determine what
planning/manage positions will even look like in future, “it’s such a dynamic
ment system industry.” Succession planning is minimally linked with other
linked to other systems, though efforts are being made to link them more
HR systems? closely. It is most linked to Strategic Planning Process. Most
significant link is to the future strategies of the organization,
and it is what differentiates Motorola’s succession planning
process from others. All other systems, i.e. Performance
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August 20, 1998
 Management, Recruiting & Selection, Compensation, etc., are
linked to the future needs of the organization as well.
Strategies drive building of organizational capability, of which
succession plans are one element. Questions other than which
candidates are available are asked first, such as: staffing flows;
skills needed and whether the skills exist generically or
whether current skills will not be needed in the future; culture;
and realignment needs. Systems, i.e. reward, performance
management, etc. need to be aligned with strategies for
required organizational capabilities.
10. Other
comments/notes
.

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August 20, 1998
Paine Webber

1. Description of No system.
career
planning/manage
ment system.
2. How extensive is N/A
the system?
3. Are high-risk N/A
positions
identified and, if
so, how?
4. How are the N/A
occupants of
high-risk
positions
assessed?
5. Are critical N/A
competencies
defined and
assessed?
6. Are high N/A
potential
candidates
designated and,
if so, how?
7. If candidates are N/A
selected, how is
this
differentiation
managed?
8. How are future Leadership development gets little to no attention.
leaders Development is basically on the job, with exposure to more
developed? senior people and through informal mentoring
9. Is the career HR function focuses on sophisticated compensation
planning/manage structures. No formal career paths. Formerly, corporate
ment system intern programs hired people right out of school, rotated them
linked to other through positions with the idea that they’d become the
HR systems? management in two or three years. Little success. Current
approach is to hire them after they have gotten initial
experiences at another firm. Turnover is still high.
10. Other
comments/notes
.

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August 20, 1998
Salomon Smith Barney

1. Description of No system of succession planning or management

career development.. Done ad hoc, a system of “who you know.”
planning/manage (An experiment was conducted that involved putting senior
ment system. peoples’ names in a box and pulling them out when a job
became available; it stopped when the merger took place.)
2. How extensive is N/A
the system?
3. Are high-risk N/A
positions
identified and, if
so, how?
4. How are the N/A
occupants of
high-risk
positions
assessed?
5. Are critical Has several competency models “scattered around the
competencies company.” No formal review.
defined and
assessed?
6. Are high Not formally; an informal process exists. People are evaluated
potential on their ability as “producers,” not managers. Compensation
candidates tied entirely to producing revenue. “Talent isn’t compensated
designated and, for management -- a dilemma we have to deal with every day.”
if so, how?
7. If candidates are N/A
selected, how is
this
differentiation
managed?
8. How are future Most talented people are paid exceedingly well in order to keep
leaders them in firm. Development through experience. Incentives
developed? completely grounded in revenue. No hierarchy of management
exists. The one exception is the retail division (from old Smith
Barney) does have an assessment center. Competencies are
used to look at sales professionals who might make good
branch managers. They have rigorous training, where they go
off-site, for a period of a few weeks, then get on-the-job
follow-up. No leadership development in any other part of the
firm. This year one is being created for the investment bank;
Morgan Stanley recently developed leadership models that has
crated pressure for other investment banks.
9. Is the career Every part of the organization has different competencies. The

Page 31
August 20, 1998
 planning/manage competencies are linked to the different systems for entry
ment system level hire. For example, “in the bank, there is a grid – 4 years
linked to other as an associate, 4 years as a manager… director -- something
HR systems? like Career pathing, but we don’t help them get there. Higher,
it’s only about producing as long as it’s not illegal. This is the
first year HR is getting them to think about these things.” No
formal career path development exists.
10. Other “Wall Street is finally looking to see what other ways they
comments/notes need to implement to succeed – maybe, just maybe this
. management thing might not be a bad idea.”

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August 20, 1998
Unilever

1. Description of A Human Resource planning program in which individuals are

career “listed” for next level and all employees go through a process
planning/manage of evaluation and development.
ment system.
1. A Management Development Schedule provides a snapshot
of each employee (history, career development, mobility).

2. Listing Nomination Form – Managers who want to submit a

“lister” complete and rate the individual’s behavior.

3. Succession Plans – completed for all senior and key

positions – focus on Unit Boards and key management
below the board level. (Boards at Unilever are the
management team of a given unit.).
2. How extensive is 100% of management force, 4 out of 5 levels in 100% of all
the system? units. Top four levels of each division go through this process.
All of the management participate. While level 1 are not
“listed” they go through the rest of the process of evaluation
and development.
3. Are high-risk All management positions at level 3 and above are considered
positions key.
identified and, if Total of about 250.
so, how?
4. How are the Everyone is assessed annually. Although people are assigned
occupants of and designated for particular roles, others may be hired into a
high-risk role from other parts of the Company or the outside the
positions division. Extent to which designated people are hired depends
assessed? on the amount of influence the HR head has in each
department.
5. Are critical Skills and competencies have been benchmarked and detailed
competencies for every position by function. Manuals describe competencies
defined and and skills for each discipline within Unilever. Competencies are
assessed? reviewed annually.
6. Are high All managers are part of the pool though only certain people
potential are listed (usually the top 5% of a division). “Listed”
candidates candidates are identified by the direct management and the
designated and, HR head in each division.
if so, how?
7. If candidates are While system is transparent, only top management and HR
selected, how is know who is “listed.” “Since the system is transparent it
this seems to work as a stimulus for people to think about
differentiation movement and development in a positive way. The listing
managed? process is not revealed so it has a minimal impact on the

Page 33
August 20, 1998
 organization.”
8. How are future Unilever has an extensive system of PDP (Professional
leaders Development Programs). Each person is rated according t the
developed? competencies and skills for each function. Three to five
developmental areas are identified by both the manager and
employee and a development program is agreed to. All are
reviewed by HR for consistency and to assess training and
development program needs (it acts as a training needs
assessment). The Unilever program for management
development lasts 2 weeks and is conducted by University
staff in England with peers from elsewhere in the company.
Each division also has their own development program.
9. Is the career It is part of a comprehensive Professional Development
planning/manage Program at Unilever that includes evaluation against skills and
ment system competencies, development in key areas, key assignments,
linked to other management development, listing and succession planning.
HR systems? Career Path: Emphasis is put on breadth of experience so that
often managers’ career paths takes them to varied
assignments, i.e. a marketing person might start as a brand
manager and then take a lateral assignment yo an overseas
regional marketing function and then come back in 18 months
to 2 years as a marketing direct.
10. Other “Though cumbersome, the process has a generally positive
comments/notes effect in helping management consider key positions, mange
. risk and consciously develop people. Managers at Unilever are
generally more rounded and developed in their field.”

Page 34
August 20, 1998
 Page 35
August 20, 1998
 Succession Planning and Management:
A Literature Review

Introduction

A critical factor in organizational performance, leadership is of central

concern to assuring the long-term viability of modern companies. With
increasingly turbulent operating and market environments, changes in
societal and consumer expectations and employment contracts, and reliance
on new forms of internal processes and controls, corporations are focusing
more intensively then ever on questions of leadership: how to ensure that
leaders have capabilities that match the needs of emerging organizations
and how to retain high potential members. Since individual development
progresses at a much slower rate than either management turnover or
organizational change, questions concerning the development of future
managers and leaders have come into focus.

As a result, succession planning and management practices have become

more prevalent in the modern corporation. Defined as any “systematic
effort to ensure the continued effective performance of an organization,
division, department, or workgroup by making provisions for the
development and replacement of key people over time,” 1 succession
planning and management resides at the intersection of three major areas:
strategic planning, management development and career planning. By
drawing on each of these areas, robust succession planning and
management systems work to retain and develop gifted managers into
leaders suited to the challenges posed by the strategic direction of the
company.

Basic Models of Succession Planning and Management

The specific elements of an effective succession planning and management

system vary from setting to setting depending, among other things, on the
distinguishing features of different organizations, such as whether a
company is experiencing low or high growth, the degree of its global

1Rothwell, William. Effective succession planning: Ensuring leadership continuity and building talent
from within. New York: AMACOM, 1994
Page 36
August 20, 1998
presence, its organizational culture, the nature of authority relationships,
and the degree of environmental (market, economic, regulatory, etc.)
turbulence it faces. Nevertheless, there are three basic models of
succession planning and management systems:

1. Replacem ent Planning -- Best suited to settings with structured career

ladders, stable work forces and unchanging corporate goals, replacement
planning consists of identifying one or two next-echelon backups for each
critical position. Replacement planning focuses on selecting the right
person for the right job. Typically, tables are created yearly that include
brief histories of replacement candidates and recent performance
evaluations. This is a slating strategy aimed at ensuring orderly
succession, without any focus on professional or career development.

2. Succession Planning -- Succession planning introduces

systematic assessment of aspiring employees and career development
incorporating, at the most sophisticated end, job profiles that identify
critical skills and competencies for effective performance in specific jobs.

Succession planning systems focus on the career development needs of

high potential candidates for managerial roles. In these systems,
managers above a certain level evaluate candidates in terms of current
performance, future potential, developmental needs, and plans for
addressing those needs. A variety of tools have been developed that are
used to assess the developmental needs of high replacement candidates,
including 360° feedback instruments, psychological assessment,
supervisory and peer evaluations, skill and competency based
performance reviews, and assessment centers.

By shifting the focus from individual jobs to developing a future cadre of

leaders, the goal of these systems is to create “bench strength.” Many
organizations have moved to this approach recognizing that jobs and
structures are no longer static and frequently changing in unpredictable
ways in response to environmental shifts. Rather than targeting people
for specific jobs, which may neither exist or exist in very different form,
succession planning attempts to identify the key skills and competencies
required for management/leadership in a given system and then help high
potential candidates develop a full complement of the relevant leadership
qualities.

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August 20, 1998
3. Succession M anagem ent -- Succession management takes the
basic approaches of succession planning and shifts the focus from
individuals to teams. This approach has been developed in recognition of
the key role of teams and cross functional collaboration in most
contemporary organizations. These systems try to discern which mix of
talent and backgrounds is required to support corporate strategies.
Decisions about filling specific jobs are considered both in terms of the
developmental needs of individuals and the skills/competencies required
of the positions and in terms of rounding out the mix of skills and
competencies on the “team” 2 that the candidate will join or currently
participates.

Components of a Succession Planning/Management

System

While the specific plan contours differ according to the unique

characteristics of each organization, these systems tend to be composed of
some common elements, including:

• Comparison of an organizations’ future needs against the current talent

pool. This includes careful assessment of the existing
management/leadership pool and an ongoing consideration of the
leadership skills and competencies that will add greatest value given the
company’s varied future strategic scenarios.

• Identification and assessment/review of high potential candidates.

• Managers are charged with considering the long-term retention and

development of high potential employees and are often held accountable
for ensuring progress on these employee’s development plans.

• A portfolio of development and evaluation tools is used to provide

opportunities for high potential candidates to excel, including training,
feedback and performance review systems, and “stretch assignments”

2The definition of team is found to vary widely from company to company. In some organizations
the term “team”is used to identify the key people managing a particular operating unit or function,
in others it is used to identify the cross-functional group assembled to solve a particular business
issue.
Page 38
August 20, 1998
 aimed at helping people learn new skills and broaden their areas of
expertise.

• Managers are encouraged to identify and explicitly provide solid

developmental experiences for high potential and high performing
managers.

• A career management system that tracks the progress and development

needs of high potential candidates. These systems are often combined
with specific “tracks” for either certain disciplines or for individuals to
gain a broad experience of a firm’s functional areas.

Key Success Factors

The predictors of successful outcomes in succession planning/managements

systems are:

• The identification of key positions.

• Top leadership involvement and commitment.

• Owned by line management, supported by human resources.

• Integrated with the firm’s strategic direction and initiatives.

• Linked explicitly to unit development and change.

• Development of people becomes part of a manager’s own review and

evaluation.

• The system is compatible with the organization’s culture.

• Succession planning/management is treated as an ongoing process rather

than an annual activity.

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August 20, 1998
Drawbacks and Pitfalls

Corporations have had mixed success in implementing effective succession

planning/management systems. Among the drawbacks and pitfalls identified
in the literature about such efforts are:

• Reluctance of mangers to release talented employees to other

assignments.

• The difficulty of coping with the anxieties and stresses involved in open
discussions of performance and potential. Some organizations have
evaded this anxiety by creating highly formalized, bureaucratic and rigid
human resource processes that get disconnected from reality.

• The dynamics evoked by the labeling process. Targeting high

performance individuals can create complications for both those identified
and those not identified. Here, companies have tried various solutions on
the continuum of how “open“ or “closed” to make a system. High
potential individuals are more likely to stay if they know they are being
recognized while those not targeted can be more likely to leave.

• Without a component of the system oriented toward diversity,

succession planning/management tends to lead to greater homogeneity
rather than diversity.

• Highly effective career management systems can lead to some

“leapfrogging” of high potential individuals, requiring these organizations
to find ways to retain and motivate those not considered as high
potential with possibly longer tenure in a particular position. It is very
important to avoid tacitly devaluing or conveying the wrong message to
“solid citizens.”

The Benefits of Career Planning/Management Systems.

In spite of the potential drawbacks of instituting such a system, the

potential benefits can be enormous, including:

Page 40
August 20, 1998
• Reduced managerial turnover.

• Retention of talented and experienced individuals with a history in the

firm 3.

• Having a pool of prepared leadership available that can be deployed

flexibly.

• Heightened motivation and performance.

• Greater clarity about what skills and competencies the company wants
from its leaders, skills/competencies which change and evolve over time,
such as the current emphasis on team membership and global
competency.

Conclusion

Succession planning/management systems address issues of such great

importance today that nearly every sizable organization is developing one.
While achieving success is difficult, the imperatives of leadership and
management in contemporary organizations is a critical success factor.
Literature and research underscores the necessity to tailor these general
features to the specifics of the organization and its varied units.

As evidenced by the rapid growth and consolidation of markets around the

world, the rapidly changing landscape of corporate structures and the recent
disasters that left organizations without their most senior management and
any plan for their succession, thoughtful and culturally adapted succession
planning/management systems are key to any organizations success.

3There is a high correlation between the amount of experience and years in a firm of senior
members, and their and the firms effectiveness and strategic success.
Page 41
August 20, 1998
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Ulrich, D., Losey, M. R., Lake, G., Eds. Tom orrow ’s HR Managem ent.
John Wiley & Sons, Inc. New York.

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Wallum, P. 1993. A broader view of succession planning. Personnel
Managem ent, vol 25, p 42-45

Weber, G. B. 1996. Growing Tomorrow’s Leaders. The Leader of the

Future. Hesselbein, F., Goldsmith, M., Beckhard, R. Eds. The Drucker
Foundation. New York.

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The Firm and its Services

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August 20, 1998
 The Firm

TRIAD CONSULTING GROUP LLC specializes in using management and

behavioral sciences and systems theory to help organizations clarify and
meet their objectives. We help our clients translate strategy into action by
aligning strategy with organizational resources, leveraging hidden assets and
knowledge, linking people and processes, and creating strategic feedback
systems that accelerate corporate learning.

Utilizing a systems perspective, TRIAD helps clients understand the

underlying factors that shape outcomes in complex organizations, the
interrelationships between system elements, and the importance of on-going
processes.

We recognize that the unique characteristics of each organization must be

understood to arrive at individually tailored, workable solutions. Our
underlying orientation emphasizes a collaborative model of consultation and
includes an approach that emphasizes the following, that:

▲ Clarity of objectives and tasks provides the essential basis for

developing coherent, high performance systems.

▲ Client participation in all phases of the consultation enhances the

quality of understanding, increases client capability and facilitates
implementation.

▲ Significant change efforts require on-going consultation from initial

assessment through implementation and evaluation.

TRIAD CONSULTING GROUP LLC was established by Marc Maltz and James
Krantz. The principals have diverse and extensive experience in
organizational consultation, and each is recognized for contributions to the
field. James Krantz has served as Associate Director of Wharton's
Leadership Program and has been on the faculties of Wharton, Yale’s School
of Management and Columbia University. Marc Maltz, has held executive
positions at AT&T, Westinghouse Electric Company, NYNEX Corporation, and
Music Mining Company, Inc., and is on the faculty of the William Alanson
White Institute’s program in The Dynamics of Organizational Development

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August 20, 1998
and Consultation. He is recognized as a leading voice in the identification
and management of resistance to change in organizations.

In conjunction with its European affiliate, The Tavistock Consultancy Service

at the Tavistock Institute in London, TRIAD offers a broad range of
organizational consultation services in the U.S. and abroad.

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August 20, 1998
 Services

Organizational Change and Developm ent

TRIAD approaches organizations with an appreciation of the increasingly
complex and turbulent operating environments that challenge today's
leadership. In working simultaneously toward quality improvement, cost
reduction, and deepened levels of employee involvement, we take a systems
approach to organizational change. We see formal structures and the
delegation of authority to individuals as tools for carrying out the primary
tasks of the organization.

Our work in assisting organizations to clarify their missions and tasks, to

implement new structures and procedures, and to develop effective
operating methods includes:

▲ Organizational Assessment Strategic

▲ Human Resource
Management
▲ Organizational Restructuring ▲ Strategy Implementation
▲ Work Re-design ▲ Career and Succession Planning
▲ Leadership/Management Transition ▲ Work Group and Team
Development

Managem ent and Leadership Developm ent

We recognize that management and leadership development must be aimed
at supporting the organization's strategic direction while providing
opportunities for individual growth and development. Our work is geared
toward helping executives and professionals understand both the explicit as
well as the unstated, and often irrational, forces affecting their roles.

We offer a variety of services to both individuals and groups, including:

▲ Role Consultation and Analysis

▲ Custom Leadership/Management Development Programs
▲ “Managing Resistance To Change” Workshops
▲ Planning and Design of Conferences and Retreats
▲ Work Group and Team Consultation and Analysis

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Applied Research
Organizations increasingly require a serious and penetrating understanding of
the complex and rapidly changing issues they face in both their social and
technical systems. TRIAD offers social and behavioral research capabilities,
including fostering client's ability to utilize research findings in practical
ways.

Our applied research services include:

▲ In-depth User-perspective Studies

▲ Internal Climate and Attitude Surveys
▲ Targeted Organizational Experiments
▲ Targeted Benchmark Studies

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 Clients

The Principals of TRIAD currently consult or have consulted to (partial list):

Private Sector
Anderson Consulting
AT&T
Austin Riggs Hospital
Calvin Klein Cosmetics Company, A Division of Unilever
Carnegie Group, Incorporated
Chase Manhattan Bank
Frito-Lay International
General Electric Company, Nuclear Energy Division
Health Technology Associates
KOCH Supplies, Inc.
McKinsey & Co.
MEDTAP International
Merck & Company, Inc.
Morgan Stanley & Co.
Nabisco Foods Group
People's Bank
Russo+Sonder, Architects & Planners
tomandandy
WEA Manufacturing Corp., A Division of Time-Warner
VITAS Healthcare
Volvo America
Xerox Corporation

Not for Profit Sector

Children's Hospital of Philadelphia
Columbia University
Elaine Kaufman Cultural Center
Hospital of the University of Pennsylvania
Legal Services Corporation, Washington, D.C.
Methodist Hospital, Houston, Texas
New York Women in Film and Television
O & O Investment Fund, Philadelphia
Servicios Legales de Puerto Rico
UNICEF
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University of Pennsylvania, School of Education
Women’s Prison Association
World Bank
WNYC

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August 20, 1998
 TRIAD Principals

J ames Krantz, Ph.D., conducts his consulting and research practice

as a multi-disciplinary thinker and practitioner. He has a Ph.D. in applied
economics and systems sciences from the Wharton School of the University
of Pennsylvania and has worked intensively in the fields of strategy
implementation, organizational change and system development. He has
worked with a wide variety of organizations and has frequently helped
members of executive teams and professional partnerships assess and
strengthen their working relationships.

Dr. Krantz has published numerous articles on the themes of organizational

change, issues of leadership in contemporary organizations, the impact of
emerging technologies and social trends on work organizations, and on
organizational irrationality. In his most recent academic post he served as
Adjunct Associate Professor of Management at the Wharton School and
Assistant Director of Wharton’s Leadership Program. Prior to that he was on
the faculty of Yale’s School of Management and Columbia University.

Marc Maltz, M.B.A., specializes in strategic, organizational and

leadership development. As a group process and systems consultant he
works with individuals and teams to balance workplace dynamics with
understanding and achieving business objectives.

Prior to developing his consulting practice, Marc held executive positions at

AT&T, Westinghouse Electric Company, NYNEX Corporation and Music Mining
Co., Inc. He brings over twenty years of experience in sales, marketing,
operations, business planning and systems development to his work at
TRIAD.

Marc has an M.B.A. from Pace University, an M.A. in History from Rutgers University and
holds postgraduate certificates from MIT’s Executive Program in Technology and the
Wharton School’s Executive Program in Finance. He is currently a faculty member in
the William Alanson White Institute’s program in The Dynamics of Organizational
Consulting. Marc is a Registered Organizational Development Professional.

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