COURSE: STRATEGIC HUMAN RESOURCE PLANNING

CHAPTER: 7 SUCCESSION MANAGEMENT

CASE STUDY: THE PEOPLE DEVELOPMENT FRAMEWORK AT FORD OF CANADA

The North American automotive industry has been facing significant challenges in recent years as the “Big Three” restructure their operations to respond to increased foreign competition, difficult economic conditions, and shifting demand as consumers migrate toward more fuel-efficient vehicles. In light of these dynamic business conditions, Ford of Canada relies heavily on organization and personnel planning processes and tools to ensure that the organization structure, internal selection practices, and succession management systems are aligned to support the future needs of the firm and the needs of its employees. With a strategic focus on maintaining a “People Development Framework,” succession planning is a key element of the organization and personnel planning function.

The HR team reviews four major areas of focus in order to make better decisions about the organization’s future direction for personnel requirements. In addition to assessing the impact of external factors such as world events, the changing marketplace, and workforce demographics, team members regularly review the operational plans in place so that functional HR objectives and action plans are properly developed and aligned to meet the long-term goals of the business. Ongoing reviews of the organization structures are conducted to ensure that the delivery of the organization’s business priorities is achieved in an efficient, flexible, and affordable manner by assessing factors such as the size of the organization, the percentage of resources deployed at each level and function, and the attraction and retention potential of the leadership level and salary grade system. Lastly and most importantly, the “people equation” is evaluated on an ongoing basis to ensure that the organization has the right people in the right positions at the right time to help the organization achieve success.

Personnel development committees (PDCs) play a central role within Ford of Canada to identify and match employee capabilities to key positions to ensure appropriate bench strength is in place. Committees exist for three broad levels of the organization including senior executive, business unit management, and line management, and PDC composition includes managers from all functional business areas to ensure cross-functional opportunities can be efficiently explored and utilized for employee development. In conjunction with department managers, PDC members are charged with the responsibility of identifying employees who demonstrate outstanding leadership abilities, strong and continual learning, and superior job performance, and then matching employees to key positions.

PDCs assess candidate bench strength for particular key positions or job families using a visual aid called a “T” chart. Employees immediately qualified are plotted on the horizontal section of the “T” while employees with future potential who require further development are identified in rank order in the vertical region of the tool. Using a graphic aid such as a “T” chart allows review committees and managers to see and compare bench depth across key positions; it further assists in the communication process as succession planning information moves vertically to other PDCs as vacancies are being filled or when bench strength is being assessed.

An integral component of the People Development Framework is the engagement and participation of the individual employee in his or her own professional development and career management. With consultation from their immediate supervisors, employees are engaged in the process through the completion of a Leadership Development Employee Profile (LDEP) and an Individual Development Plan (IDP) on an annual basis. The LDEP acts as an internal résumé to capture individual employee information for PDC or hiring manager review that includes current position details, previous Ford position history, the employee’s viewpoint on Ford, and non-Ford key accomplishments, as well as preferred developmental assignments.

The IDP reinforces the need for each employee to invest in his or her own professional development and provides an opportunity for career planning activities to further develop strengths and areas of improvement in alignment with career goals and business needs. Plans are developed between an employee and supervisor that identify developmental actions that improve current assignment performance and also position the individual for his or her desired future assignments. While partnership with the supervisor is necessary for establishing the content and implementation timing of an IDP, it is inherently critical that employees take personal ownership of the formation and maintenance of their own career plans for this tool to be successful.

As Ford of Canada business units strive to “do more with less” in a manner that delivers an efficient, profitable, and competitive position, an assessment of key position requirements and employee leadership and technical competencies is critical to ensure that employee developmental needs and placements support the delivery of the desired business outcomes. The process tools and governance structure under the People Development Framework serves to reinforce the inherent linkage and shared responsibility between employee, manager, and PDCs in the success of the organization and of individual employees.

QUESTIONS & ANSWER

1. Why is succession planning important for the Canadian automotive companies, one of which is Ford. Why does Ford have a succession management program? You will want to ensure your answer is supported with specific research. 

2. Analyze the effectiveness of Ford’s succession management program. Discuss the key elements that characterize effective succession management. What are some examples of how Ford is optimizing and leveraging their human capital? 

3. Discuss and debate the effectiveness of ensuring leadership continuity and building talent within an organization verses external to the organization as it relates to Canadian automotive companies and more particularly Ford. 

4. Analyze Ford’s succession management process (steps). What are the weaknesses of the model and make suggestions for increasing its effectiveness? 

5. Analyze Ford’s succession management process (steps). What are the strengths of the model and make suggestions for increasing its effectiveness?