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Next in line

Next in line

Great organisations plan ahead.

When Noble Coker, then CIO at Hong Kong Disneyland was asked if he would like to transfer to an operational role at the theme park, his last concern was to find a successor. He already had someone in mind. She was an internal candidate. Emily Chan had proven leadership capabilities, with good technical experience in both applications and infrastructure. She had already been nurtured, and screened by the management team and human resources (HR) department.

Done properly, succession planning can provide a supply of potential leaders, help to retain talent, and is proving crucial to ensure a corporation's fitness for the future.

"In this globalised and competitive world, it is very hard to retain talent unless there is a deliberate, intentional nurturing and cultivating of people," says John Ng, principal consultant at Meta Consulting, which focuses on leadership, learning and development.

Succession planning is about identifying future potential leaders to fill key positions, whether short-term, or long-term.

"Effective succession planning is not just about replacement, but also the developing and nurturing of a person to his or her fullest potential," says Ng.

He explains that succession planning should be seen as part of succession or talent management, which includes management sourcing, aggregate analysis of supply/demand (HR planning and auditing), skills analysis, the job filling process, and management development. "Great organisations plan ahead. Unfortunately, a lot of companies are very haphazard about succession planning. It is a low priority until something serious happens."

In-house development

According to Coker, the secret to the smooth transition between CIOs at Hong Kong Disneyland is in-house development that is ingrained into the company culture. All employees have career plans that are actively managed and continuously revised.

"We work with HR to track how different team members develop. We have one-year and three-year plans for each person, to determine the next step of career development. There is clear succession planning as we proactively work with all the direct reports, and plan how to groom our team, and round out their skill sets through training or different roles," says Coker.

In fact, job rotation is a prominent feature of Disney's HR policy, where employees are "highly encouraged to move around, to develop generalists who can understand a broad variety of issues," says Coker. He himself has been in six to eight different positions at three different business units at Disney, all in the last 10 years he has been with the company.

Today, Coker's job could not be more removed from that of a CIO's. He is the vice- president of park operations and operations development at Hong Kong Disneyland. He ensures the theme park runs smoothly, and is also involved in park expansion for the next five years. He contends that being a generalist is in fact a fundamental requirement for being a good CIO.

"A lot of people in IT say, 'I'm in IT, I'm a network engineer. The more specialised I am, the more effective and better paid I will be.' That is true as an individual contributor, but to lead in an organisation, you can't engage effectively if you don't have experience in the different areas of IT," he says.

He adds that the end-users that IT serves will not view IT as comprising disparate entities like networking, applications or infrastructure. "When the business you serve sees a blue screen, they will say 'IT stinks'. They don't differentiate, to them all of IT stinks," says Coker.

Emily Chan joined Hong Kong Disneyland in February two years ago as technology operations manager for infrastructure. After being groomed a year, she was made CIO in March this year. She is now very comfortable in her new role, as she has been learning the ropes from Coker.

Coker says: "There were a couple of people on the IT team who were strong candidates to step up to the CIO position. When Emily joined us, all her experience was in applications and we put her in infrastructure, an area that she had no experience in. She was already defined as a leader in her previous job, and she developed faster than the rest. She was the best-rounded specialist when the time came for me to move into another role."

As part of the preparation, Coker had deputised Chan to manage the IT team, and hold IT management meetings when he was away from the office, as well as ensured the management team was familiar with her.

"He always gave me the opportunity to be in front of the steering committee to do presentations so that the senior management would know me better. When Noble nominated me to be CIO, I was no longer a stranger to them," says Chan.

At Disney, the individual is encouraged to take ownership of his or her career. Both Coker and Chan had asked for opportunities to diversify their work experiences. "For me to be identified as CIO was a two-way process, I had the responsibility of telling my leader Noble that I was very interested in becoming his successor. At the same time, Noble gave me the opportunity to develop," says Chan.

Mentoring

Coker says one good way to ensure a successor succeeds in the new position is mentoring. He continues to be Chan's mentor even though they now work in completely different departments.

"I don't go into any meetings with her, but I'm a good thought partner. I give counsel and suggestions, aimed at helping Emily be successful," he says.

Where Coker is now a mentor to Chan, Coker was himself mentored by Randy Brooks, CIO for Disneyland Los Angeles, US, throughout his tenure as CIO of Hong Kong Disneyland.

Says Coker: "When I first stepped into the CIO role, I had never worked in a theme park before, and had never been a CIO before. Randy Brooks was my mentor for four to five years throughout the Hong Kong Disneyland project. He was a fantastic resource. I had regular calls with him. When I was worried, unsure how to communicate some things, he'd fly over."

For Chan, she now mentors five managers, spending an hour with each of them every week. In these meetings, they share project updates and any concerns they may have, while she shares her perspectives and approaches.

These five managers in turn have their one-hour sessions with their subordinates, the team leaders. Chan also sees one of these team leaders once a week, so she will meet the same team leader once every three to four months. In addition, there are bi-monthly meetings where the 76 IT team members meet for two hours, to celebrate birthdays or project completion, and to get business updates. "Mentoring in Hong Kong Disneyland is a fundamental thing for people development," says Chan.

Mandate from management

Ideally, developing talent should be driven by the CIO, in co-operation with HR, says Roger Olofsson, associate director, IT division, at recruitment consultancy Robert Walters.

As CIOs typically lack the luxury of time or expertise, HR has a definite role to help compile the necessary information on candidates, manage the appraisal processes, see to the training needs, and provide career advice. Many qualities are expected in today's CIO, which makes these leaders in short supply. This makes it even more imperative for organisations to have a succession plan.

"It is not easy to find people who have all the relevant CIO qualities. Hence, it is important to have formalised succession planning with programmes and processes, to identify talent internally within the organisation, and to develop that talent," says Olofsson.

"The progress and capabilities of the candidates need to be evaluated at regular intervals, and new batches of potential leaders coming along at two- to five-year intervals, depending on the CIO's tenure."

Formalised succession

At Nortel, the formalised scanning for potential leaders has helped it to have a ready crop of leaders waiting in the wings. When the previous CIO was planning to leave, Eric Lauzon was ready, having been groomed to take over. In August last year, Lauzon was appointed CIO of Nortel Asia. At Nortel, the first step in the succession planning process is a formal talent identification programme. Yearly, the company takes an overall organisational view of all the senior positions, and identifies successors for each position.

"Future leaders are identified in terms of their performance and ability to grow. They are also assessed with 360-degree development feedback from peers, customers, managers and employees, as well as assessed on their leadership potential and the personal desire to lead," says Lauzon.

He adds: "There is detailed succession planning four layers down from the CEO, and less formal succession planning for the other layers."

Nortel then ensures that the individual gets the required training and development, whether it is mentoring, attending a leadership programme, or other executive education courses, or whether the individual needs to transfer to a different position for added experience or to acquire new skills.

Being in a leadership position is not new to Lauzon. In his 20 years with Nortel, he has held several such positions in Canada, UK, China, and Singapore.

In his previous position, he spent four years in China as the Beijing R&D leader for Next Generation Networks where he led a large team of software engineers involved in various VoIP and multi-media product developments.

Besides going through the leadership training, Lauzon also took three to four months to move over from his previous role. He spent that time looking at all the applications within IT for Asia, getting an understanding of the top challenges he would face, what the major programmes and issues are, and who the different stakeholders are.

There were also lots of email, phone discussions, and some face-to-face talks with the outgoing CIO who was then based in Hong Kong.

Retaining talent

General Electrics is often held up as a shining example of succession planning done well. The corporation has managed to create internally one of the biggest talent pools for leadership.

"Their senior managers who didn't make it to leadership positions, made it elsewhere. GE's succession planning was so good that they created more leaders than they needed, and never had to go out to recruit," says Olofsson.

While succession planning is important, even more important is talent management, necessary for retaining good staff.

"Talent management or retaining good people in the organisation is the pre-cursor to succession planning," says Ng from Meta Consulting.

"Good people don't leave organisations, they leave bad bosses. Therefore, it is incumbent on bosses to take care and nurture their people, so that their talent can be retained. In today's competitive environment, people will walk out, they don't have to tolerate bad bosses."

Ng adds: "The flip side of talent management is what I call 'incompetent retention'. If good people leave, it is the not-so-competent people who stay on, who get very comfortable, and are not likely to produce."

Over at Hong Kong Disneyland, if you ask Chan where you expect her to be in five years, she may not have a definite answer. But one thing's for sure, she would have a successor waiting in the wings.

What makes a CIO

Today, the job description for a CIO reads like more like a job for a few people, not just one. Some qualities CIOs should possess include:

1. Strong and broad technology expertise.

"They don't necessarily need to be hands-on, but they need to know technology on a broad level, how technology fits together and adds value, to create a more competitive organisation," says Roger Olofsson, associate director, IT division, at recruitment consultancy Robert Walters.

2. A good understanding of accounting and finance.

"Things like ROI, writing off costs, budgeting, net present value, knowledge of accounting and financial terms need to be second nature. CIOs need to engage with business people like the CFO to justify technology spending and investment. To do that, they need to speak intelligently, define the cost in terms of investment, and the value of that investment in one, two or three years, as well as how quickly ROI can be achieved," says Olofsson.

3. A strong understanding of the business he is supporting.

"The right thing to do from day one is to understand the business and my customer, the issues and challenges related to business, customer service. Forget the technical stuff. At Hong Kong Jockey Club, their technical capability is very strong, and they don't need me for technology. I need to ensure that technology is lined up with business priorities," says Sunny Lee, executive director of IT.

4. Possess soft skills like people and vendor management skills.

"CIOs today are likely to manage a team that can range from five to 500 people in Asia. In some organisations, there is a core team of 20 to 30 in the IT team, and the rest of the technology functions are outsourced. CIOs would need line management skills, while others need to know how to get their vendors to do stuff that they previously had to get their own people to do," says Olofsson.

For Lee, when he joined the jockey club last year, a priority was to build good rapport with the management team and team members. "I needed to learn the corporate culture: how people work, and the interaction between the formal and the informal," says Lee. "I also talked to the internal customer to get good appreciation of what they think of the IT services and their challenges, in order to size up the whole scenario and situation."

5. Understand service-level agreements (SLAs), contract negotiations, and service-delivery standards.

"CIOs need to understand SLAs, service delivery and be able to do contract negotiations," says Olofsson.

As for Hong Kong Jockey Club, technology plays a big part in solving the business problem of attracting a younger crowd. "For IT, you name it, we have it," says Lee. "Our business demands the best IT. We need to be at the forefront, looking for new technology, to make us more agile."

Horse-racing fans today can make bets on the internet or through mobile devices. Technology has also made the race course a "fun" place, says Lee. Displays at the race course provide attendees with a multi-media experience. There are also self-service kiosks, and even an RFID-based system that tracks the movement of horses, and a real-time leading horse indicator that shows which horses are leading.

Across the region

Does succession planning exist in the Asia-Pacific? The short answer is both yes and no.

"Succession planning is practised, but not consistently across all organisations. Some organisations have been doing it for quite a while, but others don't have any in place at all," says Roger Olofsson, associate director, IT, Robert Walters, a recruitment consultancy.

A problem particular to Asia-Pacific is that multinationals based in Europe or US may view it as a non-core market or part of their business. Hence the region would be treated as a transitional place, a training ground for its CIO for multi-cultural exposure before the next career step or as a "thank-you", comfortable expatriate posting before easing the CIO into retirement.

"This may be good for the global organisation, but it means that local talent may not get a chance to be developed, and the CIO may not necessarily leave a strong legacy or build the local knowledge base," says Olofsson.

As for the organisations from Asia, they do practise succession planning and grooming, says Olofsson. However, the problem is that the CIO-to-be might be groomed into a "clone" version of the previous CIO.

"The pressure to conform is very strong in Asia. There is more emphasis in Asia on people being like-minded in organisations. There are lower comfort levels in terms of tolerating conflict situations and conflict management. That is where we see more of CIOs being clones of their predecessors," says Olofsson.

He adds: "One of the surest ways of not getting a top job is to have opinions that conflict with the boss's. There needs to be more freedom of independence, and a mindset of thinking independently, new ways of doing things and setting new directions."

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