Organizational Succession Planning
Funded: November 2005 Completed: June 2007
Michael K. Mount, Ph.D., Tippie College of Business, University of Iowa
Linda S. Zachar, Panera Bread of Iowa
Melanie Burns, Tippie College of Business, University of Iowa
One of the most compelling needs in organizations today is for competent, effective leadership. Despite their importance, relatively little is known about what factors are considered when identifying high potential executive replacements. Michael K. Mount and Linda S. Zachar examined the relationships between managers’ performance, the satisfaction of their employees, and whether the managers were identified as potential future leaders in the company. The study not only identified the types of individuals selected as high potentials for executives positions, but also showed how useful multi-source feedback ratings and employee attitudes can be for making such decisions.
KEY FINDINGS AND IMPLICATIONS FOR PRACTICE
Managers who were selected as potential fillers of executive positions were rated as high performers from their supervisors, peers, and subordinates alike. High potential managers also had more satisfied subordinates.
• These results reinforce the importance of multi-source feedback ratings and measures of employee satisfaction with leadership as factors to determine which managers are likely to become future leaders in the organization.
• The results can be used to formulate training programs that will develop managers‘ executive leadership potential.
Being rated as high in consideration (being fair, respectful, open, and trusting) had both positive and negative effects on perceptions of a manager’s potential. High ratings of consideration resulted in less favorable evaluations of a manager’s executive potential. However, managers who were higher in consideration had more satisfied subordinates and this led to more favorable evaluations of the manager’s executive potential.
• This suggests that subordinates and upper level managers view considerate leaders differently. Subordinates view considerate managers favorably and they prefer to work for such managers, but upper level executives view considerate managers unfavorably, especially if they do not have satisfied subordinates.
• This poses a challenge for the design of leadership development programs. Such programs need to develop managers so they are considerate enough that subordinates are satisfied with their leadership, but at the same time are not so considerate that they are viewed by executives as being “too nice.”
The relationship between performance type and manager high potential ratings varied by race and gender. For White Males to be chosen as future leaders, the ratings of the manager’s motivation is most important. For minorities and females, strong technical competence is most important for being selected as a future leader. Technical competence was three times more important for women and minorities than for Whites when being considered for fillers of the executive positions.
• Succession planning teams need to use the same standards, regardless of race or gender, when evaluating the executive potential of managers, to ensure everyone is treated fairly and not held to different standards.
Study Methods: The job performance of 789 managers employed in a technology firm was assessed by peers, subordinates, and supervisors. Subordinates’ satisfaction with their manager’s leadership was also assessed. Ratings of the managers’ potential for executive positions were made by 12 members of the top management team and used as part of the organization’s succession planning process. Relationships between these measures were examined to understand the factors succession planners consider when evaluating a manager’s potential for executive roles.
View the full list of SHRM Foundation funded research.