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Action Plan for Recommendation #7 Implement SOM Succession Plans Hyperlink to Exhibit 28: Overview of Strategic SOM Workforce Recommendations by Career Stage 127

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RECOMMENDATION #7 Implement SOM Succession Plans Description: Organizations could identify senior Recommendation Highlights leader positions that will be vacated in the near future Target Career Stage: Senior leaders due to retirements, transfers, and other means of attrition. In order to fill these vacated positions, the Will help with Retention and Development organization could offer the opportunity for entry- Estimated Time to Implement: 36 level to mid-career employees to participate in training months programs that focus on management and leadership Ensures bench strength available within issues. This type of training would help employees who the agency are interested in becoming leaders of the organization Critical for workforce planning, acquire the skills necessary for advancement and especially with the expected high continued success. Employees with strong numbers of retirements in DOTs across performance records, who demonstrate both the skills the country in coming years to succeed at the senior level and interest in a future Will help ensure that institutional leadership position, may then be matched with a senior knowledge is retained across leader who serves as a mentor. Mentoring and on-the- generations in the agency job training are particularly important when filling senior leadership positions because many of the incumbents have long tenures and there is a need to have them pass on the industry and agency knowledge they have accumulated over the years, before they retire. In addition to the type of knowledge transfer that comes from mentoring, agencies should create people-focused knowledge management systems that promote knowledge sharing among employees. One possible technique to capture this critical knowledge involves staff working in Human Resource (HR) departments interviewing senior leaders about their position and work functions. This includes collecting information on the cognitive processes that may go into making decisions as well as the rationale behind specific procedures and task performance. These interviews will help ensure that institutional memory and expertise are not lost when senior staff retire. Rationale for Recommendation: Although attrition has slowed in recent years due to the economy, studies indicate that 50% of the transportation workforce will be eligible to retire in the next 5 to 10 years, which is double the retirement rate of the nation's entire workforce (e.g., TRB Special Report 275, 2003). In addition to filling open positions due to retirements, agencies must also attempt to retain the institutional knowledge retiring employees have accumulated over their periods of employment. Implementing succession plans not only helps to ensure that the senior leader positions vacated by retiring leaders are filled with the top talent within the agency, but also it allows for the future leaders to be identified earlier in their career, trained, and mentored by existing leaders so they gain the institutional knowledge and are ready to step in as soon as senior leaders leave the agency. Succession plans are important not only because many senior leaders will be retiring over the next 10 years, but also because it is critical to have a management pipeline in place regardless of the reason senior leaders choose to leave the agency. 128

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RELEVANT POSITIONS TARGET AUDIENCES Source of Initiation Return on Investment Targeted Audience(s) Industry 0-2 years Primary: Agency leaders and talented entry-level and mid- Agency 3-5 years career staff who have been 6+ years identified as future senior leaders Primary Human Resource Focus in the agency. Estimated Time to Attraction Implement Recruitment 0-3 months Retention 3-6 months Development 7 months-1 year More than 1 year Implementation Level National Action Lead(s) Regional Agency HR Director State 129

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IMPLEMENTATION PLAN Steps to Implement 1. Assemble a Project Team. Assemble a project team composed of HR personnel and agency leaders to spearhead the development of the succession planning model. 2. Develop a Communication Plan. Communicate this plan to managers and subordinates throughout the agency. 3. Identify the Critical Leadership Positions. Consider positions that are critical to the strategic direction of the organization, influence broad policy, possess unique technical or organizational knowledge, directly interface with legislature or Congress, are highly visible, or have significant involvement with entities outside of the agency. 4. Review the Job. Review the competencies, knowledge, and qualifications needed to perform successfully in the critical leadership positions. 5. Offer Leadership Training. Offer entry-level and mid-career employees the opportunity to participate in a training program that focuses on management and leadership issues. Participation in this training program should be optional, and up to individual employees, so that those who are not interested in becoming senior managers do not invest extra time and effort beyond their regular job. 6. Assess Bench Strength. Assess bench strength by identifying top performers in the entry-level and mid-career positions (administer an interest survey, speak with supervisors, review performance evaluations). Review the competencies, knowledge, and qualifications needed to perform successfully in these entry-level and mid-career positions. 7. Conduct Gap Analysis. Identify the gaps in competency, knowledge, and qualifications between the senior leaders and entry-level and mid-career positions and develop and/or identify internal and external training to help close those gaps. 8. Assign Mentorships. Assign those who have demonstrated the necessary leadership skills and expressed interest in future leadership positions to a senior leader mentor. Senior leader mentors should teach them about leadership issues in the agency and impart the institutional knowledge they have accumulated over their years in the agency/industry. Several methods to capture this knowledge management component of workforce planning may involve additional trainings, job shadowing, presentations/discussions, interviews, and videos of senior leaders either performing their job or explaining particular aspects of the job. 9. Identify Positions for External Candidates. Identify positions that are best filled by an external pool of candidates due to a lack of developmental capabilities. 130

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10. Establish a Knowledge Management System. Identify senior leaders in the agency for HR staff to interview as part of the knowledge management so that critical information pertaining to their job and the institution is not lost with turnover. Communities of practice should be developed and participation encouraged, as another aspect of the knowledge management system. Communities of practice allow senior leaders the opportunity to attend workshops and share methods for building knowledge networks to capture tacit knowledge and develop better documentation processes. COMMUNICATIONS PLAN Communication/Outreach Strategies Write an article for an agency newsletter or website and/or send a mass email to agency employees about the program and its benefits to the employees and the agency. Some employees will want to know what they need to do to be considered for the pipeline into the senior leadership positions. As part of the identification process of future leaders, administer a survey to gauge interest from employees. Some employees who seem to be good leaders may not be interested, and others who do not immediately seem to be future leaders may actually have potential with more guidance, training, and mentoring. Identify activities that will ease the transfer of knowledge and necessary skills for a specific job such as: Junior staff in leadership pipeline shadow senior leaders. Record key questions/best practices on video or audio formats for future reference. Gather and develop case studies to portray best practices/key projects. When the project team begins working on developing the succession plan, this team should be visible and avenues should be opened that allow managers and their subordinates throughout the agency to provide input. Process for Obtaining Buy-In Meet with top leaders who are responsible for managing talent in the agency. Emphasize the resources saved due to less time recruiting and less time with senior leader positions unfilled (i.e., consistency of project management and implementation). Emphasize the opportunity to retain institutional knowledge by identifying future leaders and having them mentored by current senior leaders. 131

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USEFUL INTERNAL AND EXTERNAL RESOURCES To Implement Practice Compile job descriptions and thorough job analyses of existing senior leader positions and future position requirements, and the positions that feed into these leadership positions. Develop a database of internal and external training available to the agency/government. Create a newsletter (paper or electronic) and/or website to communicate information about the succession planning program. To Sustain Practice Requires an understanding of the senior leadership positions and how responsibilities may change over time. Thorough job analyses must be conducted of senior leadership positions every few years to identify competencies, knowledge, and qualifications needed to be a successful senior leader. Requires constant interface between the human resource function and the strategic direction of the organization/agency/business unit. Requires a database to track agency's strategies, job qualifications, and employees' skills and competencies. EXAMPLES OF EFFECTIVE PROGRAMS Minnesota DOT (Mn/DOT) Succession Planning Program. The Minnesota DOT (Mn/DOT) created its Succession Planning Program in 1994 because they estimated that around 90% of their engineering workforce and key positions would be eligible for retirement or retired by 2010. The agency's succession planning model focused on executive-level leadership and management positions and worked to prepare a roster of next-generation leaders. Mn/DOT's succession plan had a two-fold focus: (1) it identified positions the agency could develop internally, and (2) it identified those positions that the agency would benefit from recruiting externally due to a lack of developmental capabilities. Mn/DOT wanted to ensure that they had sufficient strength to maintain their critical leadership positions. Mn/DOT developed the following criteria to determine which leadership positions are critical: Position is critical to the strategic direction of the organization. There is potential for negative consequences to the organization if the position fails to succeed. Influences broad policy. Possesses unique technical or organizational knowledge critical to delivery of programs and services. Provides direct interface with legislature or Congress. 132

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Requires significant involvement with external client groups (executive level). Sustainable new initiatives give the position high visibility. To ensure that Mn/DOT had sufficient strength to maintain their critical leadership positions, the agency created a task force, composed of managers and HR personnel, to develop a succession planning model based on the workforce needs. The first part of the succession planning process involved a review of the agency's personnel pipeline in order to identify positions with at least three existing employees that could potentially fill the position. Through reviewing these leadership positions and the qualifications needed to prepare interested staff, Mn/DOT began to document the competencies, knowledge, and qualifications needed to succeed at different positions. Mn/DOT conducted a thorough review of core competencies, which ensured validation of the qualifications for each position. They developed profiles for 37 jobs to use in their succession planning model, which included the general purpose of the position and ranked criticality of competencies for each position. After identifying the agency's highest potential employees, Mn/DOT used the identified competencies and qualifications to asses each individual's knowledge and experience and determine if they would need further training to prepare them for the next level. This evaluation led the Succession Planning Program to put a prime focus on leadership development within the department. Contact information: Eric Davis, HR Director, 651-366-3402, Eric.Davis@state.Mn.us PennDOT Succession Planning Model. The Pennsylvania Department of Transportation (PennDOT) has recently revamped and implemented a succession planning model as an agency- wide practice. While elements of succession planning models existed at PennDOT before, the agency found it necessary to implement a department-wide strategy. Previously, PennDOT had the ability to pull up data and track employees' years of service/age, but now that succession planning practice has evolved. The current succession planning practice focuses on specific "at-risk" positions and the people in those positions rather than organizational-level data alone. For example, PennDOT now focuses on who is capable of filling a critical organizational position before the position is vacated. Specifically, PennDOT identifies positions that might need to be filled due to impending retirements, promotions, or transfers as well as the pool of incumbents who are capable of completing the duties associated with the at-risk position. Defining these elements is a key aspect of succession planning. The practice also includes retirement projection reports, which are distributed to regional decision-makers. Using HR data, the reports identify at-risk positions and the candidate pool to fill those positions. Once these reports are received locally, managers are asked to define potential candidates for development and promotion. This process includes entering candidates into a mentee/mentor program or job training so they are ready for and understand the roles, responsibilities, and decisions that will have to be made at the next level. This practice is not executed by the central office; it is completed in the districts and counties because local leadership has a greater understanding of their situations and the potential of their staff. Contact information: Paul Kovac, Division Chief, Workforce Development Division, 717- 787-4285, pakovac@state.pa.us Virginia DOT Knowledge Management Program. After experiencing significant losses in critical institutional knowledge during downsizing in the early 1990s and concerns that a similar situation would occur with the retirement of nearly 30% of the workforce in the next 5 years, the Virginia Department of Transportation (VDOT) established a Knowledge Management (KM) 133

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program in 2003. VDOT is able to collect both tacit and explicit knowledge through the KM program and its four primary areas including process mapping, organizational network analysis, lessons learned, and communities of practice. First, process mapping is used within communities of practice, with the objective to develop a standard way of doing process mapping to assess the interaction between different functional areas. Second, the organizational network analysis is performed through a survey that captures information that allows management to produce a visual snapshot of what is happening throughout the organization. Third, one- to two-page documents are created that capture the lessons learned by succinctly stating the lesson, its context, related resources available, and solutions. These documents are dispersed across the agency via the Intranet. Fourth, communities of practice allow for small groups of employees to come together and discuss methods for building knowledge networks to capture tacit knowledge and develop better documentation processes. As a result of the four KM components and the program in general, VDOT is better able to manage the sharing and documentation of institutional and job knowledge within their organization while preventing the loss of key data as individuals leave the agency. Contact information: Maureen Hammer, Knowledge Management Director, 434-293-1987, maureen.hammer@vdot.virginia.gov ALTERNATIVE APPROACHES Alternative Approach 1 Dedicate more resources to recruitment and selection when positions actually become available, rather than planning, training, and mentoring in advance. Dedicating resources to recruitment and selection may help to identify a larger pool of external candidates, whereas a succession plan focuses on developing staff internally. IMPACT Positive Outcomes of the Practice Bench strength within the agency to address gaps in talent. Fewer senior leader position openings in the future and a shorter amount of time needed to fill these positions with strong, qualified candidates. Greater continuity in leadership and seeing-through of the long-term vision of the agency. Better agency skill retention and performance, with less risk of institutional knowledge lost due to a high number of retirements. Generally, succession planning is perceived positively by top talent and it could help to retain them long-term if they know they have been identified as a future agency leader. 134

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CAUTIONARY CONSIDERATIONS Resources (funds and labor) will need to be expended to develop the succession plan and to develop those identified as future leaders in the agency. This is why obtaining buy-in and support from management is so important and critical for the program's success. The agency runs the risk of developing leaders who can leave for other opportunities before senior leadership positions open up within the agency. Employees may feel the additional training and mentoring provided as part of leadership preparation is unnecessary and extra work for which they are not being compensated; however, generally participation in the leadership program is regarded as a privilege. This is why the additional training should be offered but not become mandatory. 135