HR Tech: Matching Talent with Tasks

By Bill Roberts Nov 1, 2002
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HR Magazine, November 2002






Dole implements sussession planning to get ready for changes at the top.

With 61,000 workers in more than 90 countries, Dole Food Company Inc. has talent all over the world. Only a few hundred of those employees are in top management at the 151-year-old company headquartered in Westlake Village, Calif., which produces and markets fruit, vegetables and flowers. Trouble is, Dole doesn’t have comprehensive knowledge of who these managers are or what they can do.

To be sure, business unit leaders know their own direct reports well—their strengths, weaknesses, experience and career goals. The problem is, these leaders have no way to share that knowledge with other business units. If a key job opens up in North America, the business unit leader wouldn’t know if the perfect candidate worked in another Dole unit in South America. Dole has no way to match its top managerial talent with its executive needs.

But that is changing. The highly decentralized company is launching a succession planning process, supported by web-based software, through which Dole executives hope to rectify their inability to promote the best and the brightest across the corporation.

“We are looking to execute an organized process where we will identify weaknesses and strengths of our people and build plans to deal with that,” says George Horne, Dole’s vice president of administration and support operations. “We also want to identify areas where we will need to bring in some people from outside to fill some gaps at the top.”

Knowing Your People

Succession planning used to mean that a company president hoped his oldest child would join the family business and replace dad someday. If not the oldest, then any child would do.

Today, succession planning—also called workforce planning or progression planning—means having the right person in the right place at the right time for the right job, says Ren Nardoni, senior vice president at Pilat NAI, a Lebanon, N.J., subsidiary of Pilat Technologies International Ltd. of London. It means knowing your people, knowing their strengths, experience and career goals, and knowing where they need development. Succession planning helps HR and managers know what to do if a position becomes vacant. “You’re looking for the vulnerabilities of the organization,” he says.

Succession planning has grown more important since the 1980s and picked up steam in the 1990s. These days, experts say, most Fortune 500 companies take succession planning seriously, and many smaller companies embrace it.

Marc Kaiser, a consultant with Hewitt Associates in Lincolnshire, Ill., says savvy companies recognize that they must be prepared to tackle the leadership gap created by retiring baby boomers. The ability to easily automate succession planning using the web also drives interest. “It is easier now, and that’s one reason people are doing it,” he says.

Most companies that adopt succession planning automate it with software. Nardoni estimates that 50 percent to 60 percent of the Fortune 500 and 30 percent of the largest 2,500 U.S. companies have installed succession-planning systems—either stand-alone software or the succession-planning module in their HR management system (HRMS). “Our average client starts with succession planning for between 150 and 250 positions. The minute you get above 50 to 75 positions, it becomes a pain in the butt on paper,” he says.

Government agencies, such as the Federal Aviation Administration, also embrace succession planning, Nardoni says, because they have to plan for people moving in and out and retiring. However, the government’s succession planning initiatives don’t have the same intensity as those of the Fortune 500, he adds.

Succession planning correlates positively with the bottom line, says Nardoni.

Kaiser points to a 2002 Hewitt study, “Top 20 Companies for Leaders,” that shows that companies with reputations as good places to work have stronger succession planning and commit more resources to it, including the CEO’s time. Hewitt surveyed some 348 HR executives and CEOs at 240 publicly held companies on various leadership topics, identifying companies that succeed in attracting, developing and retaining leaders, and noting the practices that influenced their success.

Dole’s Culture Change

Succession planning was one of several corporatewide initiatives Dole launched in the past 18 months to decrease decentralization in an attempt to improve the bottom line, Horne says. The company was No. 353 in the Fortune 500 in 2002 with revenues of more than $4.6 billion.

Historically, Horne explains, Dole’s seven business units were so autonomous that corporate wasn’t much more than a holding company. When Larry Kern became president in February 2001, he set out to keep as much decentralization as made sense while adding some corporatewide accountability and processes.

Succession planning (Dole calls it progression planning) was one such change. The process itself would require a change of culture and could become an agent for further culture change. “The idea of succession planning is contrary to being highly decentralized,” says Sue Hagen, vice president of HR for North American operations, who led the effort.

Although Dole’s annual turnover rate among top management is less than 10 percent, succession planning was on its radar screen for years, says Hagen. “Talent is scarce. Time and cost to ramp someone up in our business is difficult and costly. It makes going outside more difficult.”

Hagen talked informally to all corporate executives, and the leaders and staffs of each business unit to generate consensus for succession planning for corporate positions—corporate officers, business unit presidents and their direct reports. The initial group would be about 100, she says. Next year, another few hundred will be included.

The reaction was mostly positive, Hagen says. “We got a range of responses. It was more an issue of education, especially for the businesses based outside the United States. We had to educate them to what the objectives were going to be and why we do it centrally rather than decentralized.”

Senior management approved the project, and Kern is especially enthusiastic, Hagen says. “He wants us to maximize the internal talent we have.”

Defining the Processes

Hagen’s next step was to hold a series of in-depth interviews with the executives to determine which succession planning processes were needed and how often they should be conducted. The goal was to reflect as much of their thinking as possible. “One division wanted to review succession plans on their people six times a year. Another didn’t want to do it at all,” she says. Hagen compromised: Succession planning will be conducted twice a year. She also identified four competencies on which everyone would be evaluated: accountability, business acumen, multi-functionality (cross training) and vision/originality.

Kaiser and another Hewitt consultant, Lisa Labat, assisted Hagen with the Dole project. “One of the first questions we ask organizations is, “What are the business needs?’” says Labat. They also ask, “What is your business today and where are you going to be taking it? What does that mean for the talent you need in place, especially at the top?”

Hagen did not want software to dictate the process, nor did she want to create a process and then search for software that exactly fit. Instead, she started to look at software while developing the process itself, looking for a package that is flexible, needs little customization and is easy to learn. The Hewitt consultants pointed her toward several products but did not participate in the selection. Hagen also networked with other HR professionals who had adopted succession-planning software.

Many HRMS software suites have an optional succession-planning module, but neither Dole nor its business units have an HRMS. Since most employees are farm or factory workers, there is not much need for the detailed information an HRMS provides, says Hagen. “It would be overkill.” In a way, the succession planning software Dole adopted will become a mini-HRMS for top personnel, she adds.

Hagen also wanted an application service provider (ASP) model. Outsourcing, including payroll, is common at Dole. Hagen didn’t want to own and support technology, and she didn’t want the small corporate information technology staff to have to work on it.

About 20 percent of the requests for proposals that Pilat NAI sees request an ASP model, and another 50 percent want information about that option, Nardoni says. He expects 25 percent or more of his business to be ASP-based in the next two years.

Hagen identified products from nine companies and asked for presentations from four. She chose Pilat NAI’s succession planning software because it was cost-effective and flexible. The inner workings of the system are invisible to Dole.

Pilat NAI runs the software on one of its servers for a monthly fee based on the number of users who will be system administrators plus a flat fee for the first 1,000 records stored on the software. Hagen serves as vendor manager, and a coworker handles day-to-day contact with Pilat NAI regarding development, troubleshooting and user issues. The contract spells out confidentiality and firewall protection for the data.

Hagen began the project in March, selected the software in April and began installing in May. The project began to roll out in September, and Dole expects to produce the first reports for management by the end of this year.

A Plan for Each Manager

Installation required less than 10 percent customization and did not require the full-time involvement of anyone at Dole. One HR person pulled data from the payroll system and fed it into the succession-planning database, but that was a one-time task. The basic data gives users a starting point.

The users—top managers—access the program from the web with a password. They fill out a resume, including career interests, and note any mobility restrictions. They assess themselves on the four competencies. When they are done, the system automatically notifies their manager, who does an assessment and indicates whether he or she thinks the individual could be promoted. The manager also assesses overall potential and the risk of losing the user. This assessment then goes automatically to the division head, then the divisional HR director, then Hagen.

All assessments will be pulled together in a report, to be reviewed by Kern, Horne, legal counsel and the chief financial officer. Hagen will use the information to create a career development plan for each individual, including seminars she’ll organize. She’ll also direct business unit leaders to potential candidates in other units when they have appropriate openings.

“The beauty is, for the first time we’ll have a database that ties together these talent metrics and can serve as a clearinghouse for people available for opportunities,” Hagen says.

The system will also help Dole identify where it has talent gaps so it can better recruit from outside, adds Horne.

Dole’s corporate management hopes all business units will eventually adopt similar succession planning processes and software, Hagen says. “I view this as a pilot, a very visible pilot,” she says. “To get the buy-in of individual business units, we’ll show them that this was adopted by their senior management and that it works.”

Bill Roberts, technology contributing editor for HR Magazine, is a freelance writer based in Los Altos, Calif., who covers business, technology and management issues.

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