oversight

Human Capital: Insights for U.S. Agencies from Other Countries' Succession Planning and Management Initiatives

Published by the Government Accountability Office on 2003-09-15.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                 United States General Accounting Office

GAO              Report to Congressional Requesters




September 2003
                 HUMAN CAPITAL
                 Insights for U.S.
                 Agencies from Other
                 Countries’ Succession
                 Planning and
                 Management
                 Initiatives




GAO-03-914

                 a

                                                September 2003


                                                HUMAN CAPITAL

                                                Insights for U.S. Agencies from Other
Highlights of GAO-03-914, a report to           Countries’ Succession Planning and
congressional requesters
                                                Management Initiatives



Leading public organizations here               Leading organizations engage in broad, integrated succession planning and
and abroad recognize that a more                management efforts that focus on strengthening both current and future
strategic approach to human                     organizational capacity. As part of this approach, these organizations identify,
capital management is essential for             develop, and select their human capital to ensure that successors are the right
change initiatives that are intended            people, with the right skills, at the right time for leadership and other key
to transform their cultures. To that
end, organizations are looking for
                                                positions. To this end, agencies in Australia, Canada, New Zealand, and the
ways to identify and develop the                United Kingdom are implementing succession planning and management
leaders, managers, and workforce                initiatives that are designed to protect and enhance organizational capacity.
necessary to face the array of                  Collectively, these agencies’ initiatives demonstrated the practices shown
challenges that will confront                   below.
government in the 21st century.
GAO conducted this study to                     Selected Practices Used by Agencies in Other Countries to Manage Succession
identify how agencies in four
countries—Australia, Canada, New
                                                  • Receive active support of top leadership. Top leadership actively participates
Zealand, and the United Kingdom—                    in, regularly uses, and ensures the needed financial and staff resources for key
are adopting a more strategic                       succession planning and management initiatives. For example, New Zealand’s
approach to managing the                            State Services Commissioner developed, with the assistance of a group of six
succession of senior executives                     agency chief executives who met regularly over a period of 2 years, a new
and other public sector employees                   governmentwide senior leadership and management development strategy.
with critical skills. These agencies’
experiences may provide insights                  • Link to strategic planning. To focus on both current and future needs and to
to executive branch agencies as                     provide leaders with a broader perspective, the Royal Canadian Mounted Police’s
they undertake their own                            succession planning and management initiative figures prominently in the
                                                    agency’s multiyear human capital plan and provides top leaders with an
succession planning and
                                                    agencywide perspective when making decisions.
management initiatives.
                                                  • Identify talent from multiple organizational levels, early in careers, or with
GAO identified the examples                         critical skills. For example, the United Kingdom’s Fast Stream program
described in this report through                    specifically targets high-potential individuals early in their civil service careers as
discussions with officials from                     well as those recently graduated from college with the aim of providing them with
central human capital agencies,                     experiences and training linked to strengthening specific competencies required
national audit offices, and agencies                for admission to the Senior Civil Service.
in Australia, Canada, New Zealand,                • Emphasize developmental assignments in addition to formal training.
and the United Kingdom, and a                       Initiatives emphasize developmental assignments in addition to formal training to
screening survey sent to senior                     strengthen high-potential employees’ skills and broaden their experience. For
human capital officials at selected                 example, Canada’s Accelerated Executive Development Program temporarily
agencies.                                           assigns executives to work in unfamiliar roles or subject areas, and in different
                                                    agencies.
                                                  • Address specific human capital challenges, such as diversity, leadership
                                                    capacity, and retention. For example, the United Kingdom created a centralized
                                                    program that targets minorities with the potential to join the Senior Civil Service.
                                                    To help retain high-potential employees, Canada’s Office of the Auditor General
                                                    provides comprehensive developmental opportunities.
                                                  • Facilitate broader transformation efforts. To find individuals to champion recent
                                                    changes in how it delivers services and interacts with stakeholders, the Family
www.gao.gov/cgi-bin/getrpt?GAO-03-914.
                                                    Court of Australia identifies and prepares future leaders who will have the skills
To view the full product, including the scope       and experiences to help the organization successfully adapt to agency
and methodology, click on the link above.           transformation.
For more information, contact J. Christopher
Mihm at (202) 512-6806 or mihmj@gao.gov.
Contents




Letter                                                                                                           1
                         Results in Brief                                                                        3
                         Background                                                                              6
                         Other Countries’ Selected Practices to Manage Succession                                8
                         Concluding Observations                                                                20
                         Agency Comments                                                                        21


Appendix
           Appendix I:   Objective, Scope, and Methodology                                                      23


Figure                   Figure 1: Section of the Royal Canadian Mounted Police’s
                                   “Succession Room”                                                            12




                         Abbreviations

                         AEXDP        Accelerated Executive Development Program (Canada)

                         FCA          Family Court of Australia 

                         OAG          Office of the Auditor General (Canada)

                         OPM          Office of Personnel Management 

                         OPS          Ontario Public Service

                         RCMP         Royal Canadian Mounted Police

                         SES          Senior Executive Service



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                         Page i                GAO-03-914 Succession Planning and Management in Other Countries
Page ii   GAO-03-914 Succession Planning and Management in Other Countries
A

United States General Accounting Office
Washington, D.C. 20548



                                    September 15, 2003 


                                    The Honorable Jo Ann Davis

                                    Chairwoman

                                    Subcommittee on Civil Service and Agency Organization

                                    Committee on Government Reform

                                    House of Representatives


                                    The Honorable George V. Voinovich

                                    Chairman

                                    Subcommittee on Oversight of Government Management, the Federal
                                     Workforce, and the District of Columbia
                                    Committee on Governmental Affairs
                                    United States Senate

                                    Leading public organizations here and abroad recognize that a more
                                    strategic approach to managing human capital should be the centerpiece of
                                    any serious change management initiative to transform the cultures of
                                    government agencies. Such organizations recognize that they need both
                                    senior leaders who are drivers of continuous improvement and who
                                    stimulate and support efforts to integrate human capital approaches with
                                    organizational goals, as well as a dynamic, results-oriented workforce with
                                    the requisite talents, knowledge, and skills to ensure that they are equipped
                                    to achieve organizational missions.1 Leading organizations are looking for
                                    ways to identify and develop the leaders, managers, and workforce
                                    necessary to face the array of challenges that will confront government in
                                    the 21st century.

                                    We are seeing increased attention to strategic human capital management
                                    and a real and growing momentum for change. The Congress required
                                    agencies in the federal government to establish a chief human capital
                                    officer in legislation creating the Department of Homeland Security
                                    enacted in November 2002.2 One of the officer’s functions is to align the
                                    agency’s human capital policies and programs with organizational mission,
                                    strategic goals, and performance outcomes. We have reported that some
                                    U.S. agencies have begun to take steps to more closely integrate their


                                    1
                                     U.S. General Accounting Office, High-Risk Series: Strategic Human Capital Management,
                                    GAO-03-120 (Washington, D.C.: January 2003).
                                    2
                                     Title XIII of Pub. L. 107-296, Nov. 25, 2002, Chief Human Capital Officers Act of 2002.




                                    Page 1                 GAO-03-914 Succession Planning and Management in Other Countries
human capital and strategic planning processes and hold both human
capital professionals and operational managers accountable for
accomplishing organizational missions and program goals.3 More recently,
the Office of Management and Budget revised Circular A-11 to require that
federal agencies’ fiscal year 2005 budget submissions as well as their
annual performance plans prepared under the Government Performance
and Results Act identify specific activities such as training, development,
and staffing that agencies plan to take to ensure leadership continuity. In
addition, as part of the Administration’s efforts to implement the
President’s Management Agenda, the Office of Personnel Management
(OPM) set the goal that continuity of leadership and knowledge is assured
through succession planning and professional development programs in
25 percent of all federal agencies by July 2004. OPM also identified the
need for agencies to reduce any current or future skill gaps in mission
critical occupations and leadership positions.

We previously reported that other countries have faced challenges in
managing their human capital and, in particular, managing individual
performance.4 In addition, other countries face a variety of succession-
related challenges. For example, Canada faces a public service workforce
with about 80 percent of both its executives and executive feeder groups
eligible to retire by the end of the decade. The United Kingdom faces the
challenge of increasing the representation of ethnic minorities among its
senior executives and has established a goal of doubling the percentage of
minority representation from 1.6 percent in 1998 to 3.2 percent by 2005.
New Zealand found that past arrangements for the governmentwide
development of its senior leaders have not worked, resulting in a shortage
of fully prepared candidates for public service leadership positions. To
address this shortage, the government has recently launched a new
strategic senior leadership and management development initiative.
Finally, Australia’s central federal human capital agency recently reported
on the changing career expectations among employees and the possible
attrition of experienced high-potential employees as two succession-
related challenges to government performance in the future.


3
 U.S. General Accounting Office, Human Capital: Selected Agency Actions to Integrate
Human Capital Approaches to Attain Mission Results, GAO-03-446 (Washington, D.C.:
Apr. 11, 2003).
4
 U.S. General Accounting Office, Results-Oriented Cultures: Insights for U.S. Agencies
from Other Countries’ Performance Management Initiatives, GAO-02-862 (Washington,
D.C.: Aug. 2, 2002).




Page 2                GAO-03-914 Succession Planning and Management in Other Countries
                    At your request, this report identifies how agencies in four countries—
                    Australia, Canada, New Zealand, and the United Kingdom—and the
                    Canadian Province of Ontario are adopting a more strategic approach to
                    managing the succession of senior executives and other public sector
                    employees with critical skills. To identify these practices, we reviewed the
                    literature associated with succession planning and management; found
                    examples illustrating these practices through the results of a screening
                    survey; analyzed written documentation; and interviewed cognizant
                    officials about the identified examples. See appendix I for additional
                    information on our objective, scope, and methodology.



Results in Brief	   Leading organizations engage in broad, integrated succession planning and
                    management efforts that focus on strengthening both current and future
                    organizational capacity. As part of this approach, these organizations
                    identify, develop, and select their human capital to ensure an ongoing
                    supply of successors who are the right people, with the right skills, at the
                    right time for leadership and other key positions. Agencies in Australia,
                    Canada, New Zealand, and the United Kingdom are implementing
                    succession planning and management initiatives that reflect this broader
                    focus on building organizational capacity.

                    While each initiative reflects its specific organizational structure, culture,
                    and priorities, collectively we found that agencies in these countries use
                    the succession planning and management practices to protect and enhance
                    the organization’s capacity. Their experiences may provide insights to U.S.
                    executive branch agencies as they undertake their own initiatives in this
                    area.


                      Succession planning and management initiatives
                      · receive active support of top leadership;
                      · link to strategic planning;
                      · 	identify talent from multiple organizational levels, early in careers, or with
                       critical skills;
                      · emphasize developmental assignments in addition to formal training;
                      · 	address specific human capital challenges, such as diversity, leadership
                       capacity, and retention; and
                      · facilitate broader transformation efforts.




                    Page 3                GAO-03-914 Succession Planning and Management in Other Countries
First, to show their support for succession planning and management,
agencies’ top leadership actively participate in, regularly use, and ensure
the needed financial and staff resources for these initiatives. For example,
New Zealand’s State Services Commissioner developed, with the assistance
of a group of six agency chief executives who met regularly over a period of
2 years, a new governmentwide senior leadership and management
development strategy. In the Ontario Public Service, the government’s top
civil servant and the heads of every ministry meet for an annual 2-day
retreat to discuss anticipated leadership needs across the government as
well as the high-potential executives who may be able to meet those needs
over the next year or two.

Second, agencies link succession planning and management with their
strategic plans to focus on both current and future needs and provide
leaders with a broader perspective. For the Royal Canadian Mounted
Police, succession planning and management not only figures prominently
in the agency’s multiyear human capital plan, but it also provides top
agency leaders with an agencywide perspective when making decisions.
To this end, the agency uses a specially designated “succession room” to
provide a visual representation of the agency’s diverse and widely
dispersed operational functions, which assists top leadership in placing
and tracking executives and managers across organizational structures.

Third, agencies use their succession planning and management initiatives
to identify talent at multiple organizational levels, early in their careers, or
with critical skills. For example, the Royal Canadian Mounted Police has
three separate programs to identify and develop high-potential employees
at several organizational levels reaching as far down as the front-line
constable. The United Kingdom’s Fast Stream program targets high-
potential individuals early in their careers. Other agencies use their
succession management initiatives to identify and develop successors for
employees with critical knowledge and skills. Transport Canada
anticipated that the retirements of key regulatory inspectors would
severely affect the agency’s ability to carry out its mandate. The agency
encouraged the use of human capital flexibilities, such as preretirement
transitional leave, to help ensure a smooth transition of knowledge from
incumbents to successors.

Fourth, agencies’ succession planning and management initiatives
emphasize developmental assignments in addition to formal training to
strengthen high-potential employees’ skills and broaden their experience.
For example, Canada’s Accelerated Executive Development Program



Page 4              GAO-03-914 Succession Planning and Management in Other Countries
temporarily assigns executives who have the potential to become assistant
deputy ministers to work in unfamiliar roles or subject areas and in
different agencies. One challenge sometimes encountered with
developmental assignments in general is that agencies resist letting their
high-potential staff leave their current positions to move to another
organization. The Accelerated Executive Development Program has
addressed this challenge by having a central government agency pay
participants’ salaries, which makes executives more willing to allow
talented staff to leave for developmental assignments. New Zealand has
responded to this challenge by appropriating funds to help defray the costs
to backfill positions for individuals on developmental assignments.

Fifth, agencies use their succession planning and management initiatives to
address specific human capital challenges such as achieving a more diverse
workforce, maintaining leadership capacity, and increasing the retention of
high-potential employees. For example, the United Kingdom created and
has actively marketed a centralized program that targets minorities with
the potential to join the Senior Civil Service. To help maintain leadership
capacity despite the fact that three quarters of Canada’s assistant deputy
ministers will be retirement eligible by 2008, the Canadian government uses
the Accelerated Executive Development Program to identify and develop
executives with the potential to effectively fill these positions in the future.
To better retain talented employees with the potential to become future
leaders, Canada’s Office of the Auditor General provides comprehensive
developmental opportunities as part of its succession planning and
management initiative.

Finally, agencies use succession planning and management to facilitate
broader transformation efforts by selecting and developing leaders and
managers who support and champion change. For example, the Family
Court of Australia is using its succession planning and management
initiative to identify and prepare future leaders who will be able to help the
organization successfully adapt to recent changes in how it delivers its
services, and then champion those changes throughout the Court. In the
United Kingdom, an official told us that the National Health Service uses its
succession planning and management initiative to select and place
executives who will champion broader organizational reform efforts.

We provided drafts of the relevant sections of this report to officials from
the central agencies responsible for human capital issues, the individual
agencies, and the national audit offices for each of the countries we
reviewed, as well as subject matter experts in the United States. They



Page 5             GAO-03-914 Succession Planning and Management in Other Countries
              generally agreed with the contents of this report. We made technical
              clarifications where appropriate. We also provided a draft of this report to
              the Director of OPM for her information.



Background	   Many federal agencies have yet to adopt succession planning and
              management initiatives. In 1997, the National Academy of Public
              Administration reported that of the 27 agencies responding to its survey,
              2 agencies had a succession planning program or process in place; 2
              agencies were planning to have one in the coming year; and 4 agencies
              were planning one in the next 2 years.5 In 1999, a joint OPM and Senior
              Executive Association survey reported that more than 50 percent of all
              career members of the Senior Executive Service (SES) said that their
              agencies did not have a formal succession planning program for the SES,
              and almost 75 percent said that their agencies did not have such a program
              for managers.6 Of those who reported that their agencies did have
              succession planning programs for either executives or managers, 54
              percent of the career senior executives said that they had not participated
              in the executive-level programs and 65 percent said they had not
              participated at the manager level. On the basis of this survey and anecdotal
              evidence, OPM officials told us in 2000 that they found that most agencies
              would not likely have a formal, comprehensive succession plan.7

              Further, we have reported that a lack of succession planning has
              contributed to two specific human capital challenges currently facing the
              federal government. The first challenge is the large percentage of career
              senior executives who will reach regular retirement eligibility over the next
              several years. In 2000, we reported that 71 percent of the SES members
              employed as of October 1998 would reach regular retirement eligibility by




              5
              National Academy of Public Administration, Managing Succession and Developing
              Leadership: Growing the Next Generation of Public Service Leaders (Washington, D.C.:
              August 1997).
              6
               1999 OPM/Senior Executive Association Survey of the Senior Executive Service. Complete
              results of the survey, along with additional background and methodological information, are
              available on OPM’s Web site at www.opm.gov/ses/survey.html.
              7
               U.S. General Accounting Office, Senior Executive Service: Retirement Trends Underscore
              the Importance of Succession Planning, GAO/GGD-00-113BR (Washington, D.C.: May 12,
              2000).




              Page 6                GAO-03-914 Succession Planning and Management in Other Countries
the end of fiscal year 2005.8 More recently, we estimated that more than
half of the SES members in federal service as of October 2000 will have left
the government by October 2007.9 We concluded that without careful
planning, these separations pose the threat of an eventual loss in
institutional knowledge, expertise, and leadership continuity.

The second challenge facing federal agencies impacted by a lack of
succession planning is the amount of diversity in their executive and
managerial ranks. As the demographics of the public served by the federal
government change, a diverse executive corps can provide agencies with
an increasingly important organizational advantage that can help them to
achieve results. We have reported that, as of 2000, minority men and
women made up about 14 percent of the career SES. If current promotion
and hiring trends continue, the proportions of minority men and women
among senior executives will likely remain virtually unchanged over the
next 4 years.10

The literature shows that public and private sector organizations use a
range of approaches when planning for, and managing, succession-related
challenges. These approaches span a continuum from the “replacement”
approach, which focuses on identifying particular individuals as possible
successors for specific top ranking positions, to the “integrated”
succession planning and management approach. Under the integrated
approach, succession planning and management is a strategic, systematic
effort that works to ensure a suitable supply of potential successors for a
variety of leadership and other key positions. These two approaches
essentially reflect a shift in emphasis of succession planning from a risk
management tool, focused on the near-term, operational need to ensure
backup people are identified in case a top position becomes vacant, to a
strategic planning tool, which identifies and develops high-potential
individuals with the aim of filling leadership and other key roles in the
future.




8
GAO/GGD-00-113BR.
9
 U.S. General Accounting Office, Senior Executive Service: Enhanced Agency Efforts
Needed to Improve Diversity as the Senior Corps Turns Over, GAO-03-34 (Washington,
D.C.: Jan. 17, 2003).
10
     GAO-03-34.




Page 7               GAO-03-914 Succession Planning and Management in Other Countries
                            GAO, similar to other federal agencies, faces an array of succession
                            planning challenges. The succession planning and management approach
                            we are using to respond to our internal challenges is consistent with the
                            practices we identified in other countries.



Other Countries’            To manage the succession of their executives and other key employees,
                            agencies in Australia, Canada, New Zealand, and the United Kingdom are
Selected Practices to       implementing succession planning and management practices that work to
Manage Succession           protect and enhance organizational capacity. Collectively, these agencies’
                            succession planning and management initiatives

                            • receive active support of top leadership;

                            • link to strategic planning;

                            •	 identify talent from multiple organizational levels, early in careers, or
                               with critical skills;

                            • emphasize developmental assignments in addition to formal training;

                            •	 address specific human capital challenges, such as diversity, leadership
                               capacity, and retention; and

                            • facilitate broader transformation efforts.



Receive Active Support of   Effective succession planning and management programs have the support
Top Leadership              and commitment of their organizations’ top leadership. Our past work has
                            shown that the demonstrated commitment of top leaders is perhaps the
                            single most important element of successful management.11 In other
                            governments and agencies, to demonstrate its support of succession
                            planning and management, top leadership (1) actively participates in the
                            initiatives, (2) regularly uses these programs to develop, place, and
                            promote individuals, and (3) ensures that these programs receive sufficient
                            financial and staff resources, and are maintained over time.



                            11
                               U.S. General Accounting Office, Management Reform: Elements of Successful
                            Improvement Initiatives, GAO/T-GGD-00-26 (Washington, D.C.: Oct. 15, 1999).




                            Page 8               GAO-03-914 Succession Planning and Management in Other Countries
For example, each year, the Secretary of the Cabinet, Ontario Public
Service’s (OPS) top civil servant, convenes and actively participates in an
annual 2-day succession planning and management retreat with the heads
of every government ministry. At this retreat, they discuss the anticipated
leadership needs across the government as well as the individual status of
about 200 high-potential executives who may be able to meet those needs
over the next year or two. Similarly, in New Zealand, the State Services
Commissioner—an official whose wide-ranging human capital
responsibilities include the appointment and review of public service chief
executives—developed, with the assistance of a group of six agency chief
executives who met regularly over a period of 2 years, a new
governmentwide senior leadership and management development
initiative. This effort culminated in the July 2003 roll out of the Executive
Leadership Programme and the creation of a new central Leadership
Development Centre.

The Royal Canadian Mounted Police’s (RCMP) senior executive committee
regularly uses the agency’s succession planning and management programs
when making decisions to develop, place, and promote its top 500-600
employees, both officers and civilians. RCMP’s executive committee,
consisting of the agency’s chief executive, the chief human capital officer,
and six other top officials, meets quarterly to discuss the organization’s
succession needs and to make the specific decisions concerning individual
staff necessary to address those needs. In 2001-2002, this process resulted
in 72 promotions and 220 lateral transfers.

Top leaders also demonstrate support by ensuring that their agency’s or
government’s succession planning and management initiatives receive
sufficient funding and staff resources necessary to operate effectively and
are maintained over time. Such commitment is critical since these
initiatives can be expensive because of the emphasis they place on
participant development. For example, a senior human capital manager
told us that the Chief Executive of the Family Court of Australia (FCA)
pledged to earmark funds when he established a multiyear succession
planning and management program in 2002 despite predictions of possible
budget cuts facing FCA. Although human capital training and development
programs are sometimes among the first programs to be cut back during
periods of retrenchment, FCA’s Chief Executive has repeatedly stated to
both internal and external stakeholders that this will not happen.

Similarly, at Statistics Canada—the Canadian federal government’s central
statistics agency—the Chief Statistician of Canada has set aside a



Page 9             GAO-03-914 Succession Planning and Management in Other Countries
                              percentage, in this case over 3 percent, of the total agency budget to
                              training and development, thus making resources available for the
                              operation of the agency’s four leadership and management development
                              programs. According to a human capital official, this strong support has
                              enabled the level of funding to remain fairly consistent over the past 10
                              years. Finally, the government of New Zealand has committed
                              NZ$19.6 million (about U.S.$11.2 million in July 2003) over four years,
                              representing both central government and agency contributions, for the
                              implementation of its new governmentwide senior leadership and
                              management development strategy.



Link to Strategic Planning	   Leading organizations use succession planning and management as a
                              strategic planning tool that focuses on current and future needs and
                              develops pools of high-potential staff in order to meet the organization’s
                              mission over the long term. That is, succession planning and management
                              is used to help the organization become what it needs to be, rather than
                              simply to recreate the existing organization. We have previously reported
                              on the importance of linking succession planning and management with the
                              forward-looking process of strategic and program planning.12 In Canada,
                              succession planning and management initiatives focus on long-term goals,
                              are closely integrated with their strategic plans, and provide a broader
                              perspective.

                              For example, at Statistics Canada, committees composed of line and senior
                              managers and human capital specialists consider the human capital
                              required to achieve its strategic goals and objectives. During the 2001
                              strategic planning process, the agency’s planning committees received
                              projections showing that a majority of the senior executives then in place
                              would retire by 2010, and the number of qualified assistant directors in the
                              executive development pool was insufficient to replace them. In response,
                              the agency increased the size of the pool and introduced a development
                              program of training, rotation, and mentoring to expedite the development
                              of those already in the pool. According to a Statistics Canada human
                              capital official, these actions, linked with the agency’s strategic planning
                              process, have helped to ensure that an adequate number of assistant
                              directors will be sufficiently prepared to succeed departing senior
                              executives.

                              12
                                 U.S. General Accounting Office, Human Capital: A Self-Assessment Checklist for Agency
                              Leaders, GAO/OCG-00-14G (Washington, D.C.: September 2000).




                              Page 10              GAO-03-914 Succession Planning and Management in Other Countries
In Ontario, succession planning and management has been a required
component of the government’s human capital planning framework since
1997. OPS requires that the head of each ministry develop a succession
plan that (1) anticipates the ministry’s needs over the next couple of years,
(2) establishes a process to identify a pool of high-potential senior
managers, and (3) links the selection of possible successors to both
ministry and governmentwide opportunities and business plans. These
plans, which are updated annually at the deputy ministers retreat, form the
basis for Ontario’s governmentwide succession planning and management
process. While OPS has not conducted a formal evaluation of the impact of
this process, a senior human capital official told us that succession
planning and management has received a much greater level of attention
from top leadership and now plays a critical role in OPS’ broader planning
and staffing efforts.

For RCMP, succession planning and management is an integral part of the
agency’s multiyear human capital plan and directly supports its strategic
needs, and it also uses this process to provide top leadership with an
agencywide perspective. RCMP is responsible for a wide range of police
functions on the federal, provincial, and local levels, such as illegal drug
and border enforcement, international peacekeeping services, and road
and highway safety. In addition, RCMP provides services in 10 provinces
and three territories covering an area larger than the United States. Its
succession planning and management system provides the RCMP
Commissioner and his executive committee with an organizationwide
picture of current and developing leadership capacity across the
organization’s many functional and geographic lines.

To achieve this, RCMP constructed a “succession room”—a dedicated
room with a graphic representation of current and potential job positions
for the organization’s top 500-600 employees covering its walls—where the
Commissioner and his top executives meet at least four times a year to
discuss succession planning and management for the entire organization.
For each of RCMP’s executive and senior manager-level positions in
headquarters and the regions, the incumbent and one or more potential
successors are depicted on individual movable cards that display relevant
background information (see fig. 1). An electronic database provides
access to more detailed information for each incumbent and potential
successors, including skills, training, and past job experience that the
executive committee considers when deciding on assignments and
transfers. In addition, high-potential individuals as well as employees
currently on developmental assignments outside RCMP are displayed.



Page 11            GAO-03-914 Succession Planning and Management in Other Countries
                                        According to a senior human capital official, because the succession room
                                        actually surrounds the RCMP’s top leadership with an accessible depiction
                                        of their complex and wide-ranging organization, it provides a powerful tool
                                        to help them take a broader, organizationwide approach to staffing and
                                        management decisions.



Figure 1: Section of the Royal Canadian Mounted Police’s “Succession Room”




                                        Page 12             GAO-03-914 Succession Planning and Management in Other Countries
Identify Talent from           Effective succession planning and management initiatives identify high-
Multiple Organizational        performing employees from multiple levels in the organization and still
                               early in their careers. In addition, leading organizations use succession
Levels, Early in Careers, or   planning and management to identify and develop knowledge and skills
with Critical Skills           that are critical in the workplace.

                               RCMP has three separate development programs that identify and develop
                               high-potential employees at several organizational levels. For example,
                               beginning at entry level, the Full Potential Program reaches as far down as
                               the front-line constable and identifies and develops individuals, both
                               civilians and officers, who demonstrate the potential to take on a future
                               management role. For more experienced staff, RCMP’s Officer Candidate
                               Development Program identifies and prepares individuals for increased
                               leadership and managerial responsibilities and to successfully compete for
                               admission to the officer candidate pool. Finally, RCMP’s Senior Executive
                               Development Process helps to identify successors for the organization’s
                               senior executive corps by selecting and developing promising officers for
                               potential promotion to the senior executive levels.

                               The United Kingdom’s Fast Stream program targets high-potential
                               individuals early in their civil service careers as well as recent college
                               graduates. The program places participants in a series of jobs designed to
                               provide experiences such as developing policy, supporting ministers, and
                               managing people and projects—each of which is linked to strengthening
                               specific competencies required for admission to the Senior Civil Service.
                               According to a senior program official, program participants are typically
                               promoted quickly, attaining mid-level management in an average of
                               3.5 years, and the Senior Civil Service in about 7 years after that.

                               Other agencies use their succession planning and management initiatives
                               to identify and develop successors for employees with critical knowledge
                               and skills. For example, Transport Canada estimated that 69 percent of its
                               safety and security regulatory employees, including inspectors, are eligible
                               for retirement by 2008. Faced with the urgent need to capture and pass on
                               the inspectors’ expertise, judgment, and insights before they retire, the
                               agency embarked on a major knowledge management initiative in 1999 as
                               part of its succession planning and management activities. To identify the
                               inspectors whose leaving would most severely affect the agency’s ability to
                               carry out its mandate, Transport Canada used criteria that assessed
                               whether the inspectors (1) possessed highly specialized knowledge, skills,
                               or expertise, (2) held one-of-a-kind positions, (3) were regarded as the “go-
                               to” people in critical situations, and/or (4) held vital corporate memory.


                               Page 13            GAO-03-914 Succession Planning and Management in Other Countries
                             Next, inspectors were asked to pass on their knowledge through
                             mentoring, coaching, and on-the-job training. To assist this knowledge
                             transfer effort, Transport Canada encouraged these inspectors to use
                             human capital flexibilities including preretirement transitional leave, which
                             allows employees to substantially reduce their workweek without reducing
                             pension and benefits payments. The Treasury Board of Canada Secretariat,
                             a federal central management agency, found that besides providing easy
                             access to highly specialized knowledge, this initiative ensures a smooth
                             transition of knowledge from incumbents to successors.



Emphasize Developmental      Leading succession planning and management initiatives emphasize
Assignments in Addition to   developmental or “stretch” assignments for high-potential employees in
                             addition to formal training. These developmental assignments place staff
Formal Training              in new roles or unfamiliar job environments in order to strengthen skills
                             and competencies and broaden their experience. In the United States,
                             training and development opportunities—including developmental
                             assignments—must be offered fairly, consistent with merit system
                             principles. However, according to a 1999 survey of career SES in the
                             United States, 67 percent reported that they had never changed jobs by
                             going to a different component within their agency or department.
                             Moreover, 91 percent said that they never served in more than one
                             department or agency during their entire executive careers.13 Agencies in
                             other countries use developmental assignments, accompanied by more
                             formal training components and other support mechanisms, to help ensure
                             that individuals are capable of performing when promoted.

                             Participants in RCMP’s Full Potential Program must complete at least two
                             6- to 12-month developmental assignments intended to enhance specific
                             competencies identified in their personalized development plans. These
                             assignments provide participants with the opportunity to learn new skills
                             and apply existing skills in different situations and experience an increased
                             level of authority, responsibility, and accountability. For example, a civilian
                             from technical operations and a police officer were given a 1-year
                             assignment to create balanced scorecards that are linked to RCMP’s goals.
                             Another program assignment involved placing a line officer, previously in
                             charge of a single RCMP unit, in the position of acting district commander


                             13
                              1999 OPM/Senior Executive Association Survey of the Senior Executive Service. Complete
                             results on these items as well as other survey questions concerning SES job experience and
                             mobility are available at www.opm.gov/ses/s30.html.




                             Page 14               GAO-03-914 Succession Planning and Management in Other Countries
responsible for the command of multiple units during a period of resource
and financial constraint. To reinforce the learning that comes from the
developmental assignments, participants attend a 6-week educational
program provided by Canada’s Centre for Management and Development
that covers the personal, interpersonal, managerial, and organizational
dimensions of leadership. Each participant also benefits from the support
and professional expertise of a senior-level mentor. Staff who complete
this program will be required to continue their formal development as
RCMP officer candidates.

In Canada’s Accelerated Executive Development Program (AEXDP),
developmental assignments form the cornerstone of efforts to prepare
senior executives for top leadership roles in the public service. Canada
created AEXDP in 1997 to strategically manage the development of senior
executives who have the potential to become assistant deputy ministers
within 2 to 6 years. AEXDP prepares individuals for these senior
leadership positions through the support of coaches and mentors, formal
learning events, and placements in a series of challenging developmental
assignments. These stretch assignments help enhance executive
competencies by having participants perform work in areas that are
unfamiliar or challenging to them in any of a large number of agencies
throughout the Canadian Public Service. For example, a participant with a
background in policy could develop his or her managerial competencies
through an assignment to manage a direct service delivery program in a
different agency. Central to the benefit of such assignments is that they
provide staff with the opportunity to practice new skills in a real-time
setting. Further, each assignment lasts approximately 2 years, which
allows time for participants to maximize their learning experience while
providing agencies with sufficient opportunity to gain a real benefit from
the participants’ contributions.

AEXDP reinforces the learning provided by the developmental assignments
with activities such as “action learning groups” where small groups of five
or six program participants meet periodically to collectively reflect on and
address actual work situations or challenges facing individual participants.
A senior official involved in the program told us that the developmental
placements help participants obtain in-depth experience in how other
organizations make decisions and solve problems, while simultaneously
developing a governmentwide network of contacts that they can call on for
expertise and advice in the future.




Page 15           GAO-03-914 Succession Planning and Management in Other Countries
                         One challenge sometimes encountered with developmental assignments in
                         general is that executives and managers resist letting their high-potential
                         staff leave their current positions to move to another organization.
                         Agencies in other countries have developed several approaches to respond
                         to this challenge. For example, once individuals are accepted into Canada’s
                         AEXDP, they are employees of, and paid by, the Public Service
                         Commission, a central agency. Officials affiliated with AEXDP told us that
                         not having to pay participants’ salaries makes executives more willing to
                         allow talented staff to leave for developmental assignments and it fosters a
                         governmentwide, rather than an agency-specific, culture among the
                         AEXDP participants.

                         In New Zealand, a senior official at the State Services Commission, the
                         central agency responsible for ensuring that agencies develop public
                         service leadership capability, told us that the Commission has
                         recommended legislation that would require that agency chief executives
                         work in partnership with the State Services Commissioner to find ways to
                         release talented people for external developmental assignments. In
                         addition, the government has appropriated NZ$600,000 (about U.S.$344,000
                         in July 2003) over the next 4 years to help the Commissioner assist agency
                         chief executives who might like to release an individual for a
                         developmental assignment but are inhibited from doing so because of
                         financial constraints, including those associated with finding a
                         replacement.



Address Specific Human   Leading organizations stay alert to human capital challenges and respond
Capital Challenges       accordingly. Government agencies around the world, including in the
                         United States, are facing challenges in the demographic makeup and
                         diversity of their senior executives. Agencies in other countries use
                         succession planning and management to achieve a more diverse
                         workforce, maintain their leadership capacity as their senior executives
                         retire, and increase the retention of high-potential staff.

                         Achieve a More Diverse Workforce. Leading organizations recognize
                         that diversity can be an organizational strength that contributes to
                         achieving results. Our work has shown that U.S. federal agencies will need
                         to enhance their efforts to improve diversity as the SES turns over.14 In


                         14
                              GAO-03-34.




                         Page 16           GAO-03-914 Succession Planning and Management in Other Countries
addition, OPM has identified an increase in workforce diversity, including
in mission critical occupations and leadership roles, as one of its human
capital management goals for implementing the President’s Management
Agenda. Both the United Kingdom and Canada use succession planning
and management systems to address the challenge of increasing the
diversity of their senior executive corps.

For example, the United Kingdom’s Cabinet Office created Pathways, a
2-year program that identifies and develops senior managers from ethnic
minorities who have the potential to reach the Senior Civil Service within
3 to 5 years. This program is intended to achieve a governmentwide goal to
double the representation of ethnic minorities in the Senior Civil Service
from 1.6 percent in 1998 to 3.2 percent by 2005. Pathways provides
executive coaching, skills training, and the chance for participants to
demonstrate their potential and talent through a variety of developmental
activities such as projects and short-term work placements. A Cabinet
Office official told us that the program is actively marketed through a series
of nationwide informational meetings held in locations with large ethnic
minority populations. In addition, program information is sent to
government agency chief executives and human capital directors, and the
top 600 senior executives across the civil service, and executives are
encouraged to supplement the self-nominating process by nominating
potential candidates. This official noted that although the first Pathways
class will not graduate until November 2003, 2 out of the 20 participants
have already been promoted to the Senior Civil Service.

Rather than a specific program, Canada uses AEXDP, an essential
component of their succession planning and management process for
senior executives, as a tool to help achieve a governmentwide diversity
target. For example, the government has set a goal that by 2003, certain
minorities will represent 20 percent of participants in all management
development programs. After conducting a survey of minorities, who
showed a considerable level of interest in the program, officials from
AEXDP devoted 1 year’s recruitment efforts to identify and select qualified
minorities. The program reported that, in the three prior AEXDP classes,
such minorities represented 4.5 percent of the total number of participants;
however, by March 2002, AEXDP achieved the goal of 20 percent minority
participation. In addition, an independent evaluation by an outside
consulting firm found that the percentage of these minorities participating
in AEXDP is more than three times the percentage in the general senior
executive population.




Page 17            GAO-03-914 Succession Planning and Management in Other Countries
Maintain Leadership Capacity. Both at home and abroad, a large
percentage of senior executives will be eligible to retire over the next
several years. In the United States, for example, the federal government
faces an estimated loss of more than half of the career SES by October
2007.15 Other countries that face the same demographic trend use
succession planning and management to maintain leadership capacity in
anticipation of the turnover of their senior executive corps due to expected
retirements. Canada is using AEXDP to address impending retirements of
assistant deputy ministers—one of the most senior executive-level
positions in its civil service. As of February 2003, for example, 76 percent
of this group are over 50, and approximately 75 percent are eligible to retire
between now and 2008. A recent independent evaluation of AEXDP by an
outside consulting firm found the program to be successful and concluded
that AEXDP participants are promoted in greater numbers than, and at a
significantly accelerated rate over, their nonprogram counterparts.
Specifically, of the participants who joined the program at the entry level,
39 percent had been promoted one level and another 7 percent had been
promoted two levels within 1 year compared to only 9 percent and 1
percent for nonparticipants during the same period. This evaluation
further concluded that AEXDP is a “valuable source” of available senior
executives and a “very important source of well-trained, future assistant
deputy ministers.”

Increase Retention of High-Potential Staff. Canada’s Office of the
Auditor General (OAG) uses succession planning and management to
provide an incentive for high-potential employees to stay with the
organization and thus preserve future leadership capacity. Specifically,
OAG identified increased retention rates of talented employees as one of
the goals of the succession planning and management program it
established in 2000. According to a senior human capital official, OAG
provided high-potential employees with comprehensive developmental
opportunities in order to raise the “exit price” that a competing employer
would need to offer to lure a high-potential employee away. The official
told us that an individual, who might otherwise have been willing to leave
OAG for a salary increase of CN$5,000, might now require CN$10,000 or
more, in consideration of the developmental opportunities offered by the
agency. Over the program’s first 18 months, annualized turnover in OAG’s
high-potential pool was 6.3 percent compared to 10.5 percent officewide.



15
     GAO-03-34.




Page 18            GAO-03-914 Succession Planning and Management in Other Countries
                         This official told us that the retention of members of this high-potential
                         pool was key to OAG’s efforts to develop future leaders.



Facilitate Broader       Effective succession planning and management initiatives provide a
Transformation Efforts   potentially powerful tool for fostering broader governmentwide or
                         agencywide transformation by selecting and developing leaders and
                         managers who support and champion change. Our work has shown the
                         critical importance of having top leaders and managers committed to, and
                         personally involved in, implementing management reforms if those reforms
                         are to succeed.16 Agencies in the United Kingdom and Australia promoted
                         the implementation of broader transformation efforts by using their
                         succession planning and management systems to support new ways of
                         doing business.

                         In 1999, the United Kingdom launched a wide-ranging reform program
                         known as Modernising Government, which focused on improving the
                         quality, coordination, and accessibility of the services government offered
                         to its citizens. Beginning in 2000, the United Kingdom’s Cabinet Office
                         started on a process that continues today of restructuring the content of its
                         leadership and management development programs to reflect this new
                         emphasis on service delivery. For example, the Top Management
                         Programme supports senior executives in developing behaviors and skills
                         for effective and responsive service delivery, and provides the opportunity
                         to discuss and receive expert guidance in topics, tools, and issues
                         associated with the delivery and reform agenda. These programs typically
                         focus on specific areas that have traditionally not been emphasized for
                         executives such as partnerships with the private sector and risk
                         assessment and management. A senior Cabinet Office official responsible
                         for executive development told us that mastering such skills is key to an
                         executive’s ability to deliver the results intended in the government’s
                         agenda.

                         The United Kingdom’s Department of Health has embarked on a major
                         reform effort involving a 10-year plan to modernize the National Health


                         16
                           U.S. General Accounting Office, Results-Oriented Cultures: Using Balanced Expectations
                         to Manage Senior Executive Performance, GAO-02-966 (Washington, D.C.: Sept. 27, 2002);
                         Managing for Results: Using Strategic Human Capital to Drive Transformational
                         Change, GAO-02-940T (Washington, D.C.: July 15, 2002); and A Model of Strategic Human
                         Capital Management, GAO-02-373SP (Washington, D.C.: Mar. 15, 2002).




                         Page 19              GAO-03-914 Succession Planning and Management in Other Countries
                Service by, among other things, devolving power from the government to
                the local health services that perform well for their patients, and breaking
                down occupational boundaries to give staff greater flexibility to provide
                care. A National Health Service official told us that the service recognizes
                the key contribution that succession planning and management programs
                can have and, therefore, selects and places executives who will champion
                its reform and healthcare service delivery improvement efforts. For
                example, the Service’s National Primary Care Development Team created a
                leadership development program specifically tailored for clinicians with
                the expectation that they will, in turn, champion new clinical approaches
                and help manage the professional and organizational change taking place
                within the health service.

                At the FCA, preparing future leaders who could help the organization
                successfully adapt to recent changes in how it delivers services is one of
                the objectives of the agency’s Leadership, Excellence, Achievement,
                Progression program, established in 2002. Specifically, over the last few
                years FCA has placed an increased emphasis on the needs of external
                stakeholders. This new emphasis is reflected in the leadership capabilities
                FCA uses when selecting and developing program participants. For
                example, one of these capabilities, “nurturing internal and external
                relationships,” emphasizes the importance of taking all stakeholders into
                account when making decisions, in contrast to the FCA’s traditional
                internally focused culture. In addition, according to a senior human capital
                manager, individuals selected to participate in the FCA’s leadership
                development program are expected to function as “national drivers of
                change within the Court.” To this end, the program provides participants
                with a combination of developmental assignments and formal training
                opportunities that place an emphasis on areas such as project and people
                management, leadership, and effective change management.



Concluding 	    As governmental agencies around the world anticipate the need for leaders
                and other key employees with the necessary competencies to successfully
Observations	   meet the complex challenges of the 21st century, they are choosing
                succession planning and management initiatives that go beyond simply
                replacing individuals in order to recreate the existing organization, to
                initiatives that strategically position the organization for the future.
                Collectively, the experiences of agencies in Australia, Canada, New
                Zealand, and the United Kingdom demonstrate how governments are using
                succession planning and management initiatives that receive the active
                support of top leadership, link to strategic planning, identify talent



                Page 20           GAO-03-914 Succession Planning and Management in Other Countries
                   throughout the organization, emphasize developmental assignments in
                   addition to formal training, address specific human capital challenges, and
                   facilitate broader transformation efforts. Taken together, these practices
                   give agencies a potentially powerful set of tools with which to strategically
                   manage their most important asset—their human capital.

                   While there is no one right way for organizations to manage the succession
                   of their leaders and other key employees, the experiences of agencies in
                   these four countries provide insights into how other governments are
                   adopting succession practices that protect and enhance organizational
                   capacity. While governments’ and agencies’ initiatives reflect their
                   individual organizational structures, cultures, and priorities, these
                   practices can guide executive branch agencies in the United States as they
                   develop their own succession planning and management initiatives in order
                   to ensure that federal agencies have the human capital capacity necessary
                   to achieve their organizational goals and effectively deliver results now and
                   in the future.



Agency Comments	   We provided drafts of the relevant sections of this report to cognizant
                   officials from the central agency responsible for human capital issues,
                   individual agencies, and the national audit office for each of the countries
                   we reviewed as well as subject matter experts in the United States. They
                   generally agreed with the contents of this report. We made technical
                   clarifications where appropriate. Because we did not evaluate the policies
                   or operations of any U.S. federal agency in this report, we did not seek
                   comments from any U.S. agency. However, because of OPM’s role in
                   providing guidance and assistance to federal agencies on succession
                   planning and leadership development, we provided a draft of this report to
                   the Director of OPM for her information.


                   As agreed with your offices, unless you publicly announce its contents
                   earlier, we plan no further distribution of this report for 30 days from the
                   date of this letter. At that time, we will provide copies of this report to
                   other interested congressional committees, the directors of OPM and the
                   Office of Management and Budget, and the foreign government officials
                   contacted for this report. In addition, we will make copies available to
                   others upon request and the report will be available at no charge on the
                   GAO Web site at www.gao.gov.




                   Page 21            GAO-03-914 Succession Planning and Management in Other Countries
If you have any questions concerning this report, please contact me or 

Lisa Shames on (202) 512-6806 or at mihmj@gao.gov and shamesl@gao.gov. 

The major contributors to this report were Peter J. Del Toro and

Rebecka L. Derr.





J. Christopher Mihm

Director, Strategic Issues





Page 22            GAO-03-914 Succession Planning and Management in Other Countries
Appendix I

Objective, Scope, and Methodology



              To meet our objective to identify how agencies in other countries are
              adopting a more strategic approach to managing the succession of senior
              executives and others with critical skills, we selected Australia, Canada,
              New Zealand, the United Kingdom, and the Canadian Province of Ontario
              based on our earlier work where we examined their implementation of
              results-oriented management and human capital reforms.1 We reviewed the
              public management and human capital literature and spoke with subject
              matter experts to obtain additional context and analysis regarding
              succession planning and management. A key resource was the National
              Academy of Public Administration’s work on the topic, including their
              maturity model and subsequent revisions, which describe the major
              succession planning process elements of initiatives that take a strategic
              approach to building organizational capacity.2

              We identified the examples illustrating the practices through the results of
              over 30 responses to a questionnaire sent to senior human capital officials
              at selected agencies. We analyzed written documentation including
              reports, procedures, guidance, and other materials concerning succession
              planning and management programs for agencies in these countries along
              with government-sponsored evaluations of these programs when available.
              We interviewed more than 50 government officials from Australia, Canada,
              New Zealand, and the United Kingdom by telephone, or in person during a
              visit to Ottawa, Canada. To obtain a variety of perspectives, we spoke to
              officials from the countries’ national audit offices, central management,
              and human capital agencies.

              The scope of our work did not include independent evaluation or
              verification of the effectiveness of the succession planning and
              management initiatives used in the four countries, including any
              performance results that agencies attributed to specific practices or
              aspects of their programs. We also did not attempt to assess the prevalence
              of the practices or challenges we cite either within or across countries.
              Therefore, countries other than those cited for a particular practice may, or

              1
               GAO-02-862 and U.S. General Accounting Office, Managing for Results: Experiences
              Abroad Suggest Insights for Federal Management Reforms, GAO/GGD-95-120 (Washington,
              D.C.: May 2, 1995).
              2
               See, National Academy of Public Administration, Paths to Leadership: Executive
              Succession Planning in the Federal Government (Washington, D.C.: December 1992), The
              State of Executive Succession Planning in the Federal Government (Washington, D.C.:
              December 1994), and Managing Succession and Developing Leadership: Growing the Next
              Generation of Public Service Leaders (Washington, D.C.: August 1997).




              Page 23             GAO-03-914 Succession Planning and Management in Other Countries
           Appendix I

           Objective, Scope, and Methodology





           may not, be engaged in the same practice. Because of the multiple
           jurisdictions covered in this report, we use the term “agency” generically to
           refer to entities of the central government including departments,
           ministries, and agencies, except when describing specific examples where
           we use the term appropriate to that case.

           We conducted our work from January through June 2003 in Washington,
           D.C., and Ottawa, Canada, in accordance with generally accepted
           government auditing standards. We provided drafts of the relevant
           sections of this report to officials from the central agencies responsible for
           human capital issues, individual agencies, and the national audit office for
           each of the countries we reviewed as well as subject matter experts in the
           United States. We also provided a draft of this report to the Director of
           OPM for her information.




(450165)   Page 24              GAO-03-914 Succession Planning and Management in Other Countries
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