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Succession Tensions Not The Norm Say 98% Of CEOs Surveyed.

CHICAGO, Jan 10, 2012 (BUSINESS WIRE) — Despite the prominence of headline-making Fortune 500 boardroom clashes in 2011, 98% of U.S. CEOs report having good relationships with their boards of directors and 95% say they believe their board supports them in the majority of decisions they make, according to a just-released survey from RHR International, a global executive talent development firm.

“While some CEOs have poor relationships with their boards, it’s clear the majority don’t fall into this category,” said RHR International Chairman and CEO Dr. Thomas J. Saporito. “The ones who do are simply the ones that make for good press.”

This groundbreaking survey of CEOs, who lead companies with annual revenues of $50 million to $2 billion, provides a thought-provoking and rare look inside the mind of chief executives. It also examines the psychological nuances that underpin C-suite dynamics in the boardroom.

Though these middle-market CEOs represent companies that make up a wide swath of the American economy, their perspectives have seldom been examined. The CEO Snapshot Survey, based on responses from 83 CEOs at public and private companies, delves into their perceptions on board relationships, succession issues, their own leadership effectiveness, and the resources they need to improve their performance.

Key Findings

– Boards Provide Positive Support

Boards are a fruitful source of feedback and support for CEOs, with 96% saying they can speak honestly with certain directors about their performance and the impact of their decisions, and 59% citing the board as their most helpful source of feedback. Fifty percent of CEOs say the lead director serves as this key board confidant, indicating the growing importance of finding the right person for this board position.

– Succession Planning Causes Breakdowns

From the CEO’s perspective, board relationships and communications begin to break down during the succession planning process. Seventy-six percent of CEOs believe they should be more involved in planning their own succession, and many CEOs report that miscommunication with the board about selection decisions and responsibilities is the most difficult part of this process. “Succession planning is full of complex psychological nuances, such as the incumbent CEO’s readiness to step down, that can make it a very difficult process,” said Dr. Saporito. “Earlier RHR research also shows CEOs need more clarity from and alignment with boards during transitions into and out of the C-Suite.”

– Complexity of the Job Surprises CEOs

There is a disconnect between CEOs’ self-proclaimed preparedness for the job and what they experience when they assume the role. Eighty-seven percent of all CEOs felt prepared for the job, yet of that group, 54% say it was different from what they originally expected. When looking at first-time CEOs only, both percentages rise: 91% felt ready for the job and 72% report it was different from their original expectations. “This is not uncommon,” said Dr. Saporito. “Stress, pressure, and loneliness all combine to create a job unlike any other they have previously had.”

– Isolation Hinders Performance

The intensity of the CEO’s job, coupled with the scarcity of peers to confide in, creates potentially dangerous feelings of isolation among chief executives. Fifty percent of all CEOs report experiencing loneliness in the role, and of this group, 61% believe that the isolation hinders their performance. First-time CEOs are particularly susceptible to this isolation, with nearly 70% of those who experience loneliness saying it negatively affects their ability to do their jobs. Nearly half of all CEOs estimate that most other leaders experience similar feelings of loneliness.

About the RHR International CEO Snapshot Survey

The CEO Snapshot Survey data collection was conducted online in October and November 2011 by Harris Interactive Service Bureau. It examines the opinions of 83 U.S. chief executive officers.

About RHR International

We are a firm of management psychologists and consultants who work closely with top management to accelerate individual, team and business performance. We focus on five key areas of client need — Executive Selection and Integration, Accelerated Executive Effectiveness, Senior Team Effectiveness, Management Due Diligence and CEO Succession. We have been proven difference-makers for more than 65 years, unique in our combination of top management focus, psychologists’ perspective and high-level business acumen.

RHR International has offices in Belgium, Brazil, Canada, China, France, Germany, Italy, Switzerland, United Kingdom and United States. The company is headquartered in Chicago, Ill. For more information, please visit http://www.rhrinternational.com or follow us on the RHR blog site, Facebook and Twitter.

SOURCE: RHR International

It’s Football Time For Human Resources.

As in most businesses without effective succession planning and talent management in the NFL, you fail. Many great coaches have said that without great players, they would not have been successful, and in the NFL, that means having effective General Managers and Player Personnel operatives.  They are the HR pros of the NFL, and the best HR pro in the NFL today is the Wizard of Oz; Ozzie Newsome of the Baltimore Ravens.  When you think about Oz’s role in relation to players (employees), coaches (managers), and executive staff & owners, there are many similarities to the HR role being provided by many of us today.

Oz began playing in Leighton, AL, with the hope of playing for the University of Alabama. That dream was realized when he went on to star for the Crimson Tide under Bear Bryant from 1974-77.  In 1978, Cleveland selected Newsome in the first round of the NFL Draft. Playing 13 years for the Browns, he had the most productive career for a tight end in the history of the game. A three-time Pro Bowler, his 662 receptions for 7,980 and 47 TDs stood as NFL records by a tight end until 2001.

So Newsome starts out working for Art Modell in Cleveland in 1991 as a scout, is then promoted to Director of  Pro Personnel, and then in 1996, VP of Player Personnel.  Oh, and while he’s doing that, Modell decides to move the franchise to Baltimore.  Ever manage the shut-down, start-up, relocation of a $1.1 billion dollar firm from an HR perspective?  Not easy, let alone doing it under a microscope of a very upset Cleveland fan-base, and very skeptical Baltimore fan-base.

In addition to his knack for evaluating talent on the field, Oz has also mastered the ability to develop and share insight with the scouts who work under him. The Ravens boast a methodical and disciplined draft process, one that’s foundation is laid years in advance. The “process” includes 15 full-time members of the personnel (HR) department, but also has feedback from Ravens coaches (Line Management).  Amazingly, the Ravens do not belong to the NFL Scouting group, which provides member teams a log of reports on players eligible for the draft.  Instead, they make their own list, and that means looking at every player on a collegiate roster.

In the Ravens’ first-ever draft, Oz  drafted OT Jonathan Ogden and LB Ray Lewis who have combined to produce 21 Pro Bowls since then.  Since drafting Ogden and Lewis, Oz has consistently compiled impressive draft classes, and in the team’s first 13 drafts Baltimore selected first-rounders who have earned a total of 39 Pro Bowl honors.  That is talent acquisition.

Oz just doesn’t miss.  Of the seven players chosen in the top 10 by Baltimore, five (Ogden, LB Peter Boulware, CB Chris McAlister, RB Jamal Lewis and LB Terrell Suggs) have earned Pro Bowl nods. Additionally, Baltimore has picked in the bottom half of the first round with uncanny success: Lewis has twice been named the NFL Defensive Player of the Year; TE Todd Heap, chosen 31st, has been to two Pro Bowls; Ed Reed, the 24th pick, went to Hawaii five times and also earned NFL Defensive Player of the Year in 2004.

It’s not just players (employees), but the securing of top flight leadership (coaches) that Oz has a penchant for as well.  Oz has created a synergy that manufactures success among the scouts, coaches and players. As a result, Baltimore has had many of its assistants move on to become head coaches on the both BCS and NFL levels: Jack Del Rio (Jaguars), Kirk Ferentz (Iowa), Marvin Lewis (Bengals), Eric Mangini (Browns/Jets), Rick Neuheisel (UCLA), Mike Nolan (49ers), Rex Ryan (Jets), Jim Schwartz (Lions), Mike Singletary (49ers), Mike Smith (Falcons) and Ken Whisenhunt (Cardinals).

What’s the secret?

  • Continuity is key as most of Oz’s staff has been with the team since the franchise started in 1996 or has graduated from the “20/20 Club,” which is a group that includes members who began with the Ravens as young assistants and grew into evaluators with more input. The term “20/20” refers to hiring “20-year-olds for $20,000.”
  • “We do a lot of cross-checking,” says Ravens director of player personnel Eric DeCosta, a graduate of Newsome’s “20/20 Club.” “A number of us look at everyone, and then we have the area scouts look at certain players from other regions so we get multiple grades and opinions on all the players.”
  • Sharing of strong opinions is encouraged by all scouts and coaches.  Oz wants to have strong opinions, noting specifically that he wants to hear what everyone in the room has to say. Because of this philosophy, Ozzie believes the biggest strength of the Ravens’ personnel team is that “we respect and listen to each other.”
  • Credibility. “Ozzie’s credibility is what stands out the most,” Ravens head coach John Harbaugh states. “And it’s not just about what he has accomplished. To me, it’s his commitment and focus while striving to do more.”
  • Building from within. “What sets us apart is that we have guys who cut their teeth right here in Baltimore, learning the way we do things,” Newsome affirms. “And we have had some great guys with Phil Savage, ‘Shack’ [James Harris], George Kokinis, Eric DeCosta and other people who were helping these young scouts along the way. I think that’s the secret. It’s not Ozzie. It’s the way we do things, and the way these guys gravitate to the process of the Baltimore Ravens.”
  • Hire passionate professionals. “[Ravens] players believe, and that’s the beauty of it,” states Ryan, who worked with Newsome from 1999-2008. “Ozzie brings in the right kind of players, and one thing we’ve always talked about is we don’t want to coach effort. And that’s the thing – we don’t. [Ravens] guys love to play the game, and those are the guys you surround yourself with. That’s why you have a chance to be successful [in Baltimore].”
  • Walk the talk. Really, go to work. Newsome’s motivation and work ethic are also reasons many people respect him. One specific way that devotion shines through is in his everyday routine. If Ozzie’s not in his office or out on the practice field, he can be found on the treadmill in the Ravens’ weight room. Exercising daily (and often putting in two-a-days), Ozzie says his workouts are just another way he tracks the pulse of the team.
  • Stay engaged.  “By being around the coaches and players out at practice,” Newsome states, “and being in that weight room around those players, I think I get a chance to build some things in my mind of how I’d like the makeup of our football team.”

OK, so now I’ve justified watching football for the next five months all in the name of Human Resources research.

7 Secrets To Successful Executive Succession Planning.

What would happen if tomorrow, the CEO didn’t exist? What would you do if he or she left,or somehow became incapacitated? Who would be the next person in line to fill the role? Under pressures of other priorities, most healthcare organizations find themselves without a plan for possible successors.

According to a report this week from National Center for Healthcare Leadership, succession planning is one of the least frequently practiced leadership development strategies, particularly at hospitals, compared to larger healthcare systems.

However, all healthcare organizations (regardless of size) should take a page out of the playbooks of some of the Fortune 500 companies, arguably the best-run organizations in the country, and seriously consider their succession plans.

“Succession planning absolutely needs to be a priority for healthcare executives,” Dr. Sanjay B. Saxena (pictured), vice president and partner of San Francisco-based global consulting firm Booz & Company, told FierceHealthcare. “There’s a significant level of drop-off in talent and experience that exists below the senior team that’s been in place. A lot of that is because healthcare executives have not consistently or uniformly taken the time to think proactively about who are the future leaders within their organizations.”

Booz recommends the following seven tips to successful succession planning:

1. Start early: Although some experts say that C-suite members and boards should always think about successors, Saxena recommends that it’s reasonable to start thinking about some of the promising players a few years into a CEO’s tenure. For example, begin succession planning at least three years from the CEO’s expected retirement. Make it an institutional activity rather than taking an ad-hoc approach.

2. Promote board-CEO teamwork: “The hospitals that have done this and are thinking about succession planning are the ones where the boards have essentially brought it on the management team and asked the management team to think through it,” Saxena said. “Absent that, few management teams are thinking about succession planning.”

Define succession planning as a joint responsibility between the board and the CEO. Better yet, make succession planning a standing agenda item in CEO board meetings.

3. Establish successor criteria: What skill sets, experiences, and behaviors do you want the next head of the organization to possess? When developing criteria for the next C-suite member, look at the organization’s anticipated market position five years out. This step requires some forecasting into overall industry trends.

“Strategically, you will want to have those individuals to be ones who have a broad-base understanding of not just the sector that they’re in–not necessarily the hospital sector–but who have exposure and understanding of some of the other pieces of the system so they understand the financing component, [such as] working at insurers or reimbursement- or contracting-related functions,” Saxena said.

4. Use that criteria to select candidates: Evaluate candidates using observable, measurable criteria. That means having one-on-one interviews to assess the operational, strategic, and financial skills and interests of the candidates. The management team and board members may find that, over time, original candidates will fall out of the running, and others may be more appropriate for the future role.

5. Gather a diverse pool of internal candidates: Employees within the organization who work up through the ranks may make the most ideal successors. Booz research found that although boards typically look outside for candidates, insiders tend to perform better and last longer. But looking within comes with a caveat; insiders can’t be complacent about the ways things are. Instead, they must be able to envision room for change and flex their muscles in multiple areas. Those who have a well-rounded view often are the strongest leaders.

That doesn’t mean to exclude external candidates, though. Assess insiders and outsiders using benchmarks for the candidates.

6. Set candidates up for success: Provide “stretch roles” for contenders to better prepare them for the CEO spot or another executive post.

“You see people who have spent their whole careers in hospital-based businesses,” Saxena said. “They know how to run and manage operating rooms, emergency rooms and different services. But if you think about where healthcare is going with the continuum of care and having a broad view of the system, it’s critical for an executive who doesn’t have visibility in the outpatient environment to get him or her that exposure.”

Give opportunities that allow potential successors to grow. Groom them for future positions with active mentoring and training programs to round out their toolkit.

7. Develop a detailed transition plan: When the time comes, detail the roles and responsibilities of the former and succeeding CEO. In addition, engage stakeholders, including board members, in developing and executing a six-month plan for this transition.

“The secret to making it work is when organizations institutionalize it,” Saxena said. “It’s about leadership development.”  Source:  Karen Cheung & Fierce Healthcare.

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