BEST PRACTICES for C-LEVEL SUCCESSION PLANS Table of Contents

BEST PRACTICES FOR C-LEVEL SUCCESSION PLANS Table of Contents

Executive Summary………………….………………….3

Case Studies

General Electric………………….……………….…...... 5 Microsoft……………………………………...... 7 Mcdonalds……………………………...... ……….11 Johnson Controls………………………..…………….11 KONE Oyj ……………………………...... ……….12 Schindler………………………………...... ….….14 BAE Systems…………………………...... …………..16 Mitsubishi Corporation …………………...... ……..19 Samsung Electronics Co., Ltd………...... ……….….21

©Copyright, Best Practice Institute Remote working 2 Case study/Research report on best practices and processes in Succession Planning in industrial and transportation manufacturing companies. Emphasis on succession planning for top critical roles.

Executive Summary

Featured Companies: Kone, Schindler, BAE, Mitsubishi Corporation and Samsung

C-Level Succession Planning

Microsoft, General Electric, Johnson Controls and Mcdonalds have quite well publicized C-Level succession planning programs. A recurrent theme running through all their succession plans was regular reviews of the successions, (sometimes up to 6 times a year), which enable the talent planning and fulfilment process to be planned, responsive and agile.

Annual Leadership Review Process

Succession planning at these companies tends to revolve around an annual leadership review process, (which utilizes extensive individual performance data), to review critical roles in the business.

Kone, for example, have an Annual Leadership and Talent Review (LTR) which focuses on the occupants of 500 leadership roles worldwide. During this process high potentials are identified, successors to key jobs are nominated and developmental actions are decided for key positions.

While Schindler Group undertake an annual forced ranking of leadership population to identify high performers and leaders with potential for critical roles in leadership and functional expertise. The Management Resource Planning process is Schindler’s annual process for review of performance of current leadership as well as succession planning

Attracting Hi-Potentials

These companies often form strong relationships with top universities and business schools in order to attract high potential candidates graduate and MBA’s in the science and engineering disciplines. Take Schindler Group, for example who have have special relationships with IMD in Lausanne, INSEAD in Fountainbleau, St Gallen in Switzerland and the London Business School in the UK and they recruit high-potential MBAs (ideally engineering or technical) every year for specific positions with future leadership roles or expert field roles in mind.

©Copyright, Best Practice Institute Remote working 3 Leadership Development program

All these companies have a strategic framework of leadership development programs designed to grow and develop high-potentials into both future leaders and functional experts. Among BAE Systems array of programs is the Leader Development Program (LDP), Prism, (which is designed to ready technical experts for critical senior roles), and the Finance GPS Program. Such programs may last anything from about 2 to 4 years, depending on the developmental challenge.

Leadership Development Interventions

These companies rely on a diverse range of tools and tactics to develop high potential talent into future leaders. Some of the most commonly cited ones are:

• Rotational Job Assignments

• Technical and professional training to obtain applicable certifications

• Pursuit of an advanced degree in a relevant field

• Leadership development training

• High-impact career development plans

• Stretch assignments to build personal leadership skills

• Conscious expansion of personal networks

• International assignments and exposure

• Targeted development of critical thinking skills

• Action Learning projects

• Face to face forums

• Virtual learning modules

©Copyright, Best Practice Institute Remote working 4 General Electric

The Management Development and Compensation Committee Charter oversee C-Level succession planning. The committee typically will meet at least six times a year. The purpose of the committee shall be to carry out the board of directors’ overall responsibility relating to organizational strength and executive compensation. The committee has the following authority and responsibilities around succession planning: ‘To assist the board in developing and evaluating potential candidates for executive positions, including the chief executive officer (CEO), and to oversee the development of executive succession plans. This responsibility shall also include overseeing the Company’s talent recruitment and retention efforts. This should include interaction with the Company’s leadership development institute, review of data from the employee survey and regular review of the results of the annual leadership evaluation process.’

GE BOARD’S 6 YEAR CEO SUCCESSION PLANNING PROCESS

2011 Detailed succession planning initiated 2013 Succession timing identified

• Management Development and • Board plans for summer 2017 as timing for Compensation Committee (MDCC) CEO transition dedicates portion of every meeting to CEO succession • CEO candidates appointed to larger leadership roles • Candidates moved into CEO preparatory roles • Initial draft of leadership criteria for the next Board increases time spent on ceo CEO is completed 2014 succession Successor criteria refined 2012 • MDCC dedicates additional time to CEO • Leadership criteria for next CEO is refined succession, including pre-Board sessions • Including the previously identified internal • Successor criteria continues to be refined candidates, the CEO succession list expands in light of the business environment and to encompass other key leaders strategic needs of the company

©Copyright, Best Practice Institute Remote working 5 2015 Board considers external 2016 Board and immelt work closely with final candidates; intensifies focus on candidates internal ones • Board visits continue. MDCC work intensifies. Final • Board visits, providing candidates candidates confirmed with increased exposure • Jeff Immelt intensifies in-depth coaching work with • MDCC and Jeff Immelt ensure final candidates targeted development and growth • Final candidates have increased exposure to plans for all CEO candidates investors and media • External candidates reviewed, • Board finalizes succession roadmap including detailed profiles on the • 360 degree leadership assessment on all candidates top 10 • Detailed roadmap developed for summer 2017 CEO • Board refines list to focus on decision and transition internal candidates only; Following review of external candidates, Board determines internal 2017 Final transition planning and succession candidates had best attributes to • Board interviews individual candidates - early May lead company • Individual candidate questions by Board to • Board reaffirms summer 2017 understand their vision for the company as timing for CEO transition, • Final review and evaluation of candidates against with Chairman transition to be strategic needs of the company completed by January 2018 • Board voted on CEO on June 9, 2017

©Copyright, Best Practice Institute Remote working 6 Microsoft ‘Talent Talks’ is Microsoft Succession Planning Process for the CEO’s Direct Reports Microsoft wanted their leaders to be accountable to building organizational capability, to ensure that their processes were rigorous and that the CEO could get an end-to-end view of the depth of talent. The framework of Talent Talks centers around the following objectives: to identify the strength of the bench, how external talent is being cultivated, work through succession planning and review talent inflow and outflow. Present at each Talent Talk is CEO Satya Nadella, Kathleen Hogan CHRO Microsoft, the talent leader (Joe Whittinghill), the senior leader and an HR partner. During the discussion, they talk about the leaders’ directs, how they’re thinking about their succession planning, their talent, the strength of the bench and any external talent they’ve brought in and are cultivating. The small group also reviews hiring by level, examines the “net talent inflow,” assesses competitor influence and talks about how the leader and the team may be impacted if someone leaves compared to how they’d fare with robust bench strength. As potential successors are identified, their leader asks whether they’re interested in becoming a successor, rather than assuming so and putting them on a list. Hogan mentioned a time when she put successors on a list without speaking to them first—a mistake she didn’t make twice. Talent Talks ensure that leaders create plans that are real, and the potential successors are viable and ready for their roles. his forward-looking approach helps Microsoft avoid being blindsided and also helps cultivate talent in a way that encourages career growth.”

Key Interview Excerpts with Gallup and CHRO at Microsoft on C-Level Succession Planning How do you develop talent and prepare your business for the future when your organization spans over 90 countries and more than 110,000 people? Hogan: This was one of the very first questions I asked myself when I stepped into my role three years ago. I had been leading our Services organization, which is Microsoft’s consulting team, so while I had no “direct” HR experience coming into my role, I definitely had a strong focus on the value of our people and the importance of talent. Working with leaders across the company and with our CEO, Satya Nadella, led us to revise our succession planning and talent review system -- a new process we call Talent Talks.

©Copyright, Best Practice Institute Remote working 7 What was the goal of Talent Talks? Hogan: At its core, it was about being intentional about our talent and preparing for the future. At the same time, we wanted to eliminate anxiety in the process of having talent discussions, and instead create open discussions with real purpose and business value. A lot has been written about “today’s Microsoft.” We’re focused on lifelong learning and a growth mindset, and our approach to our people, processes and products is really different than it was in the past. Under Satya’s leadership, we’ve taken a hard look at not just how we do things, but why we do them. One of our major adjustments in the HR space was how we look at talent for both today’s and tomorrow’s needs on the individual level, as well as how we look at our talent bench at a higher, organizational level. In the past, we had a process called “People Review” that ended up creating significant nervous energy for a lot of people. While the initial approach was sound, it had deteriorated into a process of number analysis and wasn’t yielding results. Our former CEO Steve Ballmer decided it wasn’t adding value, and it was shuttered in 2014. As we looked at our culture, we recognized a key part of embodying a growth mindset is learning from your past to reinvent a better future. With that concept in mind, our leadership team decided to revive the concept of People Review, but with a new process and a new name. We decided to call it Talent Talks, because we wanted to make it less abrasive and judgmental -- and more about placing an emphasis on developing our talent and planning for the future. We needed some way for our leaders to be accountable to building organizational capability, and to ensure that our processes were rigorous and our CEO could get an end-to-end view of the depth of our talent.

This seems like a huge overhaul for a company the size of Microsoft. How did you get started? Hogan: The first year, we decided to pilot the discussions, and we took on certain topics like diversity and succession planning. By the second year as we had institutionalized those topics, we were able to include more topics. And by the third year, we have a much more thorough approach to discussing talent. We think talent should be something that you think about all the time, so our approach is that Talent Talks are just a moment in time to check in with the CEO, versus cramming for a review once a year. When we developed our Talent Talks framework, we decided to start at the leadership level and move down three more clicks -- so in addition to being focused on Satya’s direct reports, we would focus on our direct reports, and their directs. The objective is to identify the strength of the bench, how external talent is being cultivated, work through succession planning, review talent inflow and outflow, etc. So while we do Talent Talks at certain times of the year, talent is something we think about year-round -- it’s certainly always on my mind! And because of the process we’ve put around Talent Talks, I am always able and ready to present our talent story to Satya or our Board of Directors.

©Copyright, Best Practice Institute Remote working 8 This sounds like a pretty thorough process. How much time does Satya and the leadership team invest in this? Hogan: For some of our leaders, that means a review covering a 15,000-person organization. In a case like that, we spend more time on the directs and their directs and we look at their teams -- this is a significant investment of time. Each of Satya’s directs holds their own process to drive succession planning and building organizational capability. And that feeds into the process that Satya holds (Talent Talks), which involves a meaningful amount of time for each direct report and their organization. At each Talent Talk, we have Satya, me, the Senior Leader with their HR partner, and also our talent leader, Joe Whittinghill. It’s a small group, and we try to keep it small. We talk about the leaders’ directs, how they’re thinking about their succession planning, their talent, the strength of the bench and any external talent they’ve brought in and are cultivating. We talk about hiring by level, we look at net talent inflow, we consider competitor influence, and we discuss how a leader might be exposed if someone left, versus where they have lots of up-and-comers and bench strength. We also review all the organization’s partners too. We have about 1,200 partners in the company -- so if a leader has partners, we’re looking at them, even if they’re not a direct report. We take a look at talent that came into the group and talent that went out to see if we can identify patterns to understand why people are moving. It’s helpful to understand if the moves are simply career progression or something else so we can course correct in areas that need help. We ask them to discuss how they’re activating our culture, including being intentional about creating a diverse and inclusive work environment. Each leader will also talk about their goals and summarize the state of people or culture and process to ensure we’re spending time on the future leaders. The final step is what we call our Combined Talent Talks. Each leader does their individual Talent Talk with Satya, then a couple of weeks later, we have the go-to-market (our sales and marketing leaders) Talent Talk where we’ll look holistically across marketing segments and the field (global sales). The second Combined Talent Talk is across our engineering groups where leaders of engineering will look at all the topics that span across their organizations from a talent perspective. These have been powerful additions to the process as it gives Satya and his leaders time to jointly discuss talent topics that are common and key across these groups, and the outcome is to have aligned points of view that drive talent decisions. It’s a major investment, but we believe it’s well worth it.

One major aspect of Talent Talks is succession planning. How do you go about that process? Hogan: Each leader and their directs identify their potential successors. Successful succession planning is more than just identifying who will take over in the case of a role move -- it means having a conversation to see if the identified individual is interested in being the successor. It sounds obvious, but you can’t just put somebody on the list without having talked to them first. I learned this lesson the hard way. As a business leader going through my first year of our former People Review process, I was asked about external candidates I had on my succession plan. It was clear I had put the names on this list, but I’d never talked or met with them. I didn’t make that mistake twice, and when the time came for me to move into my role in HR, I had five to six external candidates in addition to the internal candidates

©Copyright, Best Practice Institute Remote working 9 that I actively cultivated. The process worked, and we were able to quickly hire and move a new leader into my former role. I brought this perspective to the Talent Talks process, making sure that leaders create plans that are real and the potential successors are viable and ready for these roles. This forward-looking approach helps us avoid being blindsided and also helps cultivate talent in a way that encourages career growth.

Do you use the Talent Talks process only for succession planning, or is this also about moving people across the company? Hogan: When we started our journey to change the culture at Microsoft, we already had aspirations to achieve something we call “One Microsoft.” This simply means we’re all aligned for the better good of our company, our employees, our customers -- we operate as one unit, even though we’re spread all over the world and work on a gamut of products and services. Talent Talks is definitely instrumental in leaders’ career development, and we use the process to look at leaders who needs to gain new and different experiences. Satya has often said that he found it helpful to move around and have different experiences before he became the CEO. I feel the same way -- my career journey is filled with a variety of experiences in different organizations. So within Talent Talks, we look at gaps that someone might have, and we consider ways to move them around to help shore up those needs. We also believe it’s incredibly helpful in creating a spirit of “One Microsoft” at the company. When you’ve worked in different groups during your career at the company, you can bring different and diverse perspectives to new roles -- and maintain great affinity for your former teams.

©Copyright, Best Practice Institute Remote working 10 Mcdonalds Succession planning process ensures regular access to internal talent, both formally and informally. “In a 2010 webinar conducted by the Kelley School of Business, McDonald’s Chairman Andrew J. McKenna said, “I think that the greatest risk facing a board is that they do not pick the right CEO or, in turn, that the CEO does not pick the right people behind him.” This led to a discussion on succession planning and talent-development practices in global companies. Citing his experience at McDonald’s, McKenna said, “At McDonald’s, the board of directors has six regularly scheduled board meetings, and one of these meetings is entirely devoted to a discussion of succession planning and talent development at the C level and throughout the company. Beyond this one meeting, a portion of every board executive session is devoted to a discussion of succession planning and talent-development issues.” Finally, McKenna noted that he can “identify several current leaders at McDonald’s around the world who have demonstrated a performance profile such that they have been identified as potential C-level leaders 10 years from today at McDonald’s.”

Johnson Controls Johnson Controls had just two CEOs— both internally developed — during the 20 year study period. James Keyes joined the company in 1966, became president in 1986, and served as CEO from 1988 until 2004. John Barth joined the company in 1969, served in a variety of management roles before becoming president in 1998, and served as CEO until 2009, when another internally developed leader, Stephen Roell, became CEO. Roell still mans that post and also serves as chairman. The period of Keyes’ leadership was dramatic in terms of delivering value to shareholders. When he became CEO, the company had sales of $3 billion. By the end of 2003, sales were more than $22 billion, and Keyes had established an enviable record for increasing earnings. The key metrics from 1987 until 2007 include average annual returns of 17.8 percent stock appreciation, 13.9 percent revenue growth, 14.9 percent return on equity, 9.1 percent earnings-per-share growth, a 9.01 percent return on investment and a 5.8 percent return on assets. Talent development is a core focus for Johnson Controls’ leadership team. Keyes, now retired, remembers it this way: “We were growing rapidly and we were always looking for leaders to run new businesses. We gave people lots of responsibility, and the good leaders grew quickly. You put someone in a new situation and you could see how they handled it, how they managed. What was always key was how they developed people.” Several internal business leaders at Johnson Controls competed for, but did not get, the top position, yet they went on to become CEOs at other organizations. (The same has been true at GE.) Growing businesses create an urgency for developing talent. As Keyes put it, “Developing and growing people through your organization has benefits for everyone.”

©Copyright, Best Practice Institute Remote working 11 KONE Oyj

Founded in 1910 and headquartered in Helsinki, Finland, Kone is an international engineering & service company employing 55,000 across 60 countries worldwide. Rev. 9 Billion USD.

KONE’s Annual Leadership and Talent “High Potential” is defined as the ability, Review (LTR) focuses on the occupants of 500 commitment and motivation to succeed in leadership roles worldwide. This review of top more senior leadership positions. critical roles requires that all businesses and geographic areas A “walk and write” approach is used at LTR meetings to stimulate input and discussion 1. identify high potentials, about the candidates. Reviewing the succession plan for the top positions is also nominate successors to key positions, 2. part of the meeting, giving a measure of the 3. decide on development actions for people ‘bench strength’ of areas and businesses, as in key positions. well as an indication of the need for external recruitment, and the urgency of renewal in Areas and businesses are expected to management teams. nominate 1-5% of their staff for review which represents approximately 300 high potentials As is common practice in the Nordic countries, (HiPo’s) worldwide who do not currently HiPo’s and succession candidates are not occupy key positions. usually informed of their status. KONE believes that 70% of development happens through Identifying high potentials at an early job, project and rotational challenges, 20% by career stage, (6 months prior to potential learning through others (HiPo’s have a mentor appointment), is and many receive special coaching), and 10% considered optimal as individuals can be through formal education and training. provided with targeted personal development, which includes: The Role of HR at Kone • KONE leadership training programs, The Head of Talent Management is • cross-functional and geographical moves responsible for kicking off the LTR process, and stretch assignments, providing guidance and tools, and travelling • and mentoring as well as coaching. to all Area- and Unit-level LTR workshops to ensure they are run effectively. The executive team steer this review process by setting annual targets including: Open Culture • diversity(gender and nationality), • development (proportion undergoing job KONE has created a talent culture in which rotation), managers openly talk about individuals from • and, recruitment (external versus internal the perspective of personal growth and sourcing). thinking about developmental opportunities.

©Copyright, Best Practice Institute Remote working 12 One significant factor that is attributed to the evolution of this talent mindset is the support and commitment from the highest levels of management, including the CEO. Another factor has been the development of global tools and processes.

Bench-strength To ensure there are sufficient numbers of competent, ready and available successor candidates and meeting job rotation and diversity targets, KONE HR have improved recruitment quality by becoming more active in helping managers to identify rotation opportunities, and ramped up efforts to identify HiPos earlier by going down levels in the organization and introducing country-level LTR workshops.

China -Shortage of High Potentials China posed particular challenges for the global talent management process in KONE. Kone entered the market relatively late compared to it’s global competition. They found there was shortage of high potentials: few of the Chinese managers satisfied the global Basic Requirements, notably fluent English. KONE relaxed the global criteria, allowing also local HiPo’s to be nominated who did not speak English. Partly due to expectations for rapid career progression amongst Chinese employees, the high potential identification process in China was also pushed down to branch level.

©Copyright, Best Practice Institute Remote working 13 Schindler

The Schindler Group is a Swiss multinational company which manufactures escalators, moving walkways, and elevators worldwide. Revenues: CHF 10,179,000,000

Attracting Hi-Potentials Develop both future leaders and functional expertise Schindler Group develops MBAs into leadership roles. They have special The Management Resource Planning process relationships with IMD in Lausanne, INSEAD is Schindler’s annual process for review of in Fountainbleau, St Gallen in Switzerland performance of current leadership as well as and the London Business School in the UK succession planning. and they recruit MBAs (ideally engineering or technical) every year for specific positions and The Schindler Leadership Framework help them identify their potential and develop describes the key behaviors which they them into leadership roles or expert field roles. expect from leaders. It is the foundation for all leadership assessment, selection, and Succession Planning and Leadership development activities. Schindler worked Development with Towers Watson to create an employee engagement survey back in 2014 which The Succession Planning and People enabled them to develop their leadership Development processes will assess the framework and formulate a leadership candidate’s potential, and allow for early career and development planning. development programme for senior leaders based on the Schindler Leadership Framework. Schindler evaluate performance annually based not only on what has been achieved A Leadership Development Review but also how it has been achieved. There is conducted annually and prompts a is a specific focus on key strategic roles in conversation between employee and manager. the branches where operational excellence Development actions for the employees to is critical. They encourage managers to improve their leadership skills are identified set challenging goals and reward high and initiated. performance through recognition, financial The Schindler Talent Radar process identifies incentives, and most importantly development and develops mid-career leaders for future opportunities. Schindler undertake an annual senior leadership roles. forced ranking of the leadership population to identify high performers and leaders with Leadership development opportunities, potential. Their goal is to fill the majority of such as training programs, special project our leadership and expertise roles internally assignments, international development through development and promotion. assignments, job rotations, etc. are offered

©Copyright, Best Practice Institute Remote working 14 for all levels within Schindler to provide opportunities to develop leadership behaviors

The Schindler Career Development Program provides unique opportunities for early-career leaders to grow their leadership skills. It is a long-term, on-the-job management training program with a time frame of six years that gives grads the chance to rise to top positions in mission critical areas They provide visible and flexible career paths for all employees seeking to grow their career. Technical, business, and leadership training courses offer opportunities for all employees to develop the necessary skills for success. Field staff certification ensures that our technicians have the skills to meet and exceed their customer expectations and needs. They selectively provide opportunities for international assignments to transfer expertise, develop their people and promote diversity

BAE Systems plc (BAE) is a British multinational defence, security, and aerospace company with over 100,000 employees world-wide. Revenues £18 Billion.

BAE Systems Leadership Development Program objectives Programmes Architecture • Build business acumen BAE systems has a strategic framework of • Assess and develop critical capabilities leadership programs designed to develop • Engage in stretch assignments to build high potential talent. personal leadership skills • Expand personal networks 1. BAE Systems Leader Development • Create high-impact career development plans Programme (LDP) is designed to attract, develop, and retain high potential, entry-level Nomination process professionals capable of assuming positions of Program selection is determined annually through leadership within BAE Systems. The business area and/or functional nomination and is two- to three-year program consists of four key based on an interview process. components: 3.Finance GPS Programme • Rotational Job Assignments, generally This two-year program provides development rotating on a yearly basis opportunities for high performing, early • Technical and professional training to obtain to mid-career finance employees, with the applicable certifications aim of creating a well-trained and broadly • Pursuit of an advanced degree in a relevant experienced talent base. The program field involves soft skill training, career planning and • Leadership development training development, special projects, and personal coaching and monitoring. It is designed for At the conclusion of the two-to-three year Finance employees based in the United States program, participants will be assisted in who are at global grades 10 to 11. finding a role at BAE Systems that aligns with their enhanced experience and leadership Program objectives potential. • Increase exposure 2. Catalyst focuses on growing the skills and • Enhance networking skills • Develop leadership skills capabilities of BAE Systems’ high potential, early career employees. Featuring two Nomination process face-to-face forums, virtual learning modules, and action learning projects, the program The Finance Leadership Team (FLT) nominates is designed to develop the skills necessary potential candidates from their employee pool. to meet the challenges of future leadership The FLT will hold discussions with nominees roles across BAE Systems, Inc. The program prior to applying. The nominee will then submit is intended for employees at global grades an application, resume, and one page personal 9 to 10 who have 5 to 7 years of professional essay. The interview process includes a panel experience. interview and personal background presentation.

©Copyright, Best Practice Institute Remote working 16 4. Prism is a two-year program offering training • Advance an enterprise talent mindset to and experiential learning for high potential, inspire and develop ourpeople to drive mid-career employees with 8 -15 years of success industry experience. It is designed to increase • Build a strong global network with ELP the readiness and technical skills of employees colleagues from across the enterprise to within select functions by using targeted promote collaboration on innovation and and unique training methods tailored to business winning employees’ specific development needs. The program also allows for two-way mentorship Nomination process opportunities. Program selection is determined annually Program objectives through business area or functional nomination • Engage in stretch assignments to build and based on an interview process personal leadership skills 6. Growth Leader Development (GLD) • Create high-impact career development plans • Expand personal networks Sponsored by Business Winning, this 18-month program aims to train the company’s future Nomination process leaders in the art of capture. GLD cohorts Employees are nominated by their function. learn through classroom training, hands-on Functions are given a designated number of experience, and participation in color reviews. spots for each cohort. Cohorts and GLD alumni attend quarterly dinners featuring speakers from executive 5. Emerging Leaders Programme leadership and capture expert consultants. The GLD graduate network provides This program, consisting of three face-to- face weeklong modules, is designed for a valuable, career-long resource. Cohorts senior leaders (grades 11 to 14) who are spend two to three days per month training, ready to lead BAE Systems in increasingly participating in strategy sessions and meeting complex, dynamic, and competitive times. with GLD peers and current capture leaders. In addition to engaging with internal leaders and externalfaculty to build key leadership Program objectives capabilities, ELP participants will partner on real business challenges to build business • Prepare capture team leaders responsible acumen and gain experience working on for winning competitive business through global virtual teams. The program also collaboration with customers supports building an enterprise-wide network • Learn design and development of capture of colleagues to leverage for support and execution supported by coaches collaboration on business efforts. • Learn to manage complexity, risk, and uncertainty The program also features action learning • Impact a capture team environment projects, competitive advantage exercises, and • Lead captures from initial qualified executive and peer coaching. opportunity to win party • Advocate and position to solve a customer Program objectives or market need • Develop strategic agility through a global • Advocate for resources and commitments to understanding of the internal and external win landscape: our markets, customers, shareholders, and competitors Nomination process • Identify a personal vision and create an authentic leadership brand to inspire and Business area leadership and supervisors engage others nominate cohorts.

Designed for high potential and high • Develop critical thinking skills to understand performance women and people of color at what makes a business competitive and global grades 12 to 15*, this two-year program what the business needs to do to enable is intended to support advancement that will business competitiveness positively impact representation in leadership • Modify leadership skills to implement change level roles. The program includes monthly • Provide exposure to ES best practices meetings with an assigned sponsor as well • Advance participants’ personal networks as bi-annual development and networking • Share and reflect upon experiences and opportunities. apply tools and resources to enhance strategic leadership skills Program objectives • Increase retention rate of high potential Nomination process women and people of color as leaders Program selection is determined annually through • Build broader and deeper awareness among business area and functional nomination. senior leaders of talented women and people of color 9. Leading Complex Projects, Programs, and • Reinforce a culture that supports diversity Portfolios (LCP3) & inclusion by prioritizing development of diverse talent This 18-month program combines academic research with real-life experience to promote the Nomination process development of critical thinking and reflection. The program focuses on the development Program selection is determined every two of behavioral competencies for leadership of years through business area or functional complex bids, programs, and projects leading to nomination. culture change. It also provides an opportunity to share experience across the global businesses 8. Horizon and use practical application of knowledge and This 18-month program combines academic experience to generate real value for projects and research with real-life experience to promote the company. the development of critical thinking and The LCP3 program goes beyond traditional reflection. The program focuses on the training courses, allowing participants to hone development of behavioral competencies for their skills during a series of highly practical leadership of complex bids, programs, and competency masterclasses that can be applied projects leading to culture change. It also directly to the workplace through reflective provides an opportunity to share experience practice assignments and action learning. The across the global businesses and use practical program is designed for senior leaders in capture application of knowledge and experience to and delivery roles — primarily project directors generate real value for projects and and portfolio managers — in global grades 14 to 17. the company. The LCP3 program goes Program objectives beyond traditional training courses, allowing participants to hone their skills during a series • Improve decision-making of highly practical competency masterclasses • Increase expertise in management of that can be applied directly to the workplace complex projects through reflective practice assignments and • Engage with leading academic research action learning. The program is designed for • Build professional networks and share best senior leaders in capture and delivery roles practices — primarily project directors and portfolio • Broaden understanding of how to win new managers — in global grades 14 to 17 and follow-on business

Leadership Development and Succession These assignments are designed to build up Planning employees’ management skills and networks with other program participants from diverse MC offers leadership development training cultures and industries. programs that are designed to sharpen employees’ thinking as managers and equip 4. Joint Program them with the skills to help grow business value. These programs help to enhance MC has an array of stepwise programs to employees’ business and digital-strategy strengthen the management expertise of conception skills and their HR management all employees throughout the MC Group, skills. meaning not only those from the parent company, but also those from MC offices and 1. Innovators’ Program group companies in Japan and around the world (approximately 80,000 employees in Run by MC with the support of professors total). Every year, about 150 high potential from Stanford University, this program is employees attend these “training camps,” held in Silicon Valley and aims to nurture the which aim to equip them with management conception skills necessary to grow business skills and get them thinking like business value. It is a good platform for learning about leaders. Many of the seminars are taught by design thinking and other thought processes instructors from overseas business schools. that inspire innovation, as well as the background and mechanisms behind the rapid 5. Program for Global Leaders growth of Silicon Valley enterprises. Retreat-style training offered by Harvard 2. Online Business School Business School professors and other Designed for employees at Management instructors over a total 10 days, to help Grade, this system enables participants to participants master the management skills take online correspondence courses from top necessary to lead their own organization overseas universities. Participants are free 6. Program for Leadership Development to choose from a wide range of programs covering leadership, strategy, finance and Retreat-style training offered over a total other courses. of 5 days in collaboration with INSEAD to help participants acquire business skills as 3. Executive Education in Overseas Business managers Schools 7. MC Leadership Program Every year, approximately 50 employees are enrolled in short-term programs at top Designed to equip participants with the universities in the US, Europe and Asia. leadership know-how and skills to support

©Copyright, Best Practice Institute Remote working 19 subordinates’ career growth and otherwise 10. Seminar for MC Group Executives manage organizations, this training targets approximately 150 team-leader candidates per This program, which targets officer candidates, year. has been running since fiscal year 2003. Its pillar is its management workshops, which 8. Business Management Program involve discussions with VPs and other current At present, 30% of MC’s employees are on executives on a variety of management secondments to the company’s subsidiaries issues. Lively opinion exchanges with the and affiliates, which they are directly engaged diversely experienced participants, lectures in managing. The objective of the Business by internal and external business leaders, and Management Program is to provide such other rich content make this program a good secondees with the skills in leadership, opportunity for officer candidates to broaden diversity management, strategizing and their perspectives, learn how high-level governance that are necessary to run managers think and network with professionals organizations and enhance business value. from all of MC’s Business Groups.

Number of Program Name Eligible Employees Recipients Business Basic Skill Program 1st or 2nd year employees 130 Business Advanced Skill Program 3rd year employees 157 Global Trainee Program 2nd year and up employees 86 Program for Leadership Manager class employees 36 Development Program for Global Leaders General Manager class employees 41

MC KEIEIJUKU Managing Director class employees 34 (executive development program)

Number of Training Recipients (non-consolidated basis, FY2019)

Samsung Electronics Co., Ltd is a South Korean multinational electronics company headquartered in the Yeongtong District of Suwon. Revenues circa 200 billion USD.

Succession Planning and Leadership Training Programs Development Process Samsung provides training programs tailored Samsung supports all of its employees around to different job levels and positions for all the world so that they can grow within the employees around the world based on three same systematic training system. Every year, pillars— Core Program, Leadership Program, the company conducts an EDP (Expertise and Expertise Program—so that they share the Development Process) assessment for all same vision for the values and future growth. employees and focuses on self-directed On an annual basis, four million people learning by allowing them to set their own participate an average of 8 hours with training annual training plan according to the results programs around the world. of the assessment on individual expertise and skills. Samsung Leadership Development Program Nurturing Next-generation Core Leaders. Assessment and Selection of High Potential Recruiting from top business schools in Candidates the country each year, the Leadership Samsung conducts its STaR (Samsung Talent Development Program (LDP) hosts a small Review) Sessions in association with its EDP cohort of high-potential candidates from (Expertise Development Process). The STaR diverse backgrounds with the dual intention Sessions are a comprehensive talent nurturing of cultivating individual professional growth process that supports employees in designing and infusing Samsung with strong, future an individual career path and establishing leadership. a clear vision with their supervisor. Through this process employees can apply for various Samsung launched the LDP in 2016 with human resource development programs, such the goal of training its future senior leaders. as an MBA, academic training, regional expert Targeting recent MBA graduates, the program class, or job expert provides experience in general management through a diverse set of working rotations, course. STaR Sessions provide employees a robust roadmap of training courses, and with a fair and transparent opportunity in their numerous opportunities for networking and developmental process through which they mentorship with company leaders. can experience a variety of innovation and creative programs, while also allowing the The LDP has three main categories of company to build a pool of high-potentials. rotations: Product Marketing for twelve months, Strategy & Operations for six months, Every year, over 2,000 employees apply for and Sales & Marketing for six months. Within the company’s learning and development these three categories lie an array of available programs through the StaR Sessions rotations, affording high potentials the

©Copyright, Best Practice Institute Remote working 21 opportunity to explore numerous roles and immediate integration into their first rotations. responsibilities. Expectations run high as responsibilities, autonomy, and team support are doled out In the Product Marketing rotation, employees in equal measure. While experiences will vary will help guide products through a complete from rotation to rotation, candidates will be lifecycle. They coordinate or lead multiple exposed to all levels of stakeholders, from functions including design, supply chain, executives to cross-functional peers, as you consumer insights, finance, sales, and more as proceed through each of the three unique you and your team take products from feature rotation categories. development to market launch to end-of-life transitioning. Depending on the In addition to the primary rotations, roles and responsibilities of the rotation, a canididates will participate in numerous healthy mix of interaction with customers, networking and training activities. These leaders at Samsung Electronics Headquarters provide additional touchpoints to meet and in Suwon, Korea and multiple levels of learn from leaders throughout the company. stakeholders can be expected. The Samsung Asia Elite (SAE) Program In the Strategy & Operations (S&O) rotation, spans two years and is designed to place employee have a broad range of opportunities successful high potential graduates on a to choose from. In addition to a more fast-track career path within Samsung. traditional role in strategic planning, there are any number of functional areas that provide Some of the program highlights consists of: critical support towards driving business • On-the-job training through exciting goals. Paul Guzek, Penn State MBA, served his business rotations S&O rotation in Customer Care, an important • Local, Regional and Global training touchpoint with Samsung customers, where opportunities he helped launch a brand new business • Mentoring and leveraged this experience toward his • Interaction with Senior Executives through subsequent product marketing rotation with formal and informal channels the Mobile device team. • Opportunity to complete a world-renowned In the Sales & Marketing rotation, employees MBA program in Korea will spend six months supporting one of • Competitive compensation and benefits these respective functional teams within the company. In a marketing role, responsibilities Samsung Expertise Program can include consolidating market insights Samsung offers learning opportunities to develop consumer profiles, developing for employees to become the industry strategic messaging hierarchies, generating leading expert in respective areas: R&D, marketing briefs and managing relationships marketing, sales, service, logistics, purchasing, with agencies, and collaborating on brand manufacturing, and business management. creative projects that are both general and Training occurs in the Samsung Advanced product-specific. More traditional sales Technology Research Institute (R&D) and rotations center on developing strong the Samsung Marketing Academy (sales/ relationships with the customer and working in marketing), the Global Technology cross-functional teams to achieve sales-driven Center (manufacturing) and Global CS Center KPIs. (service). From day one, LDP candidates hit the ground running with a short orientation followed by

1. GE: GE Board’s CEO Succession Planning Process DETAILED https://www.ge.com/news/sites/default/files/FINAL%20Timeline%20Infographic.pdf

2. General Electric: The Management Development and Compensation Committee Charter https://www.ge.com/sites/default/files/MDCC_Charter_Dec_2019.pdf

3. https://hrexecutive.com/microsoft-reveals-secrets-to-superior-succession-planning/ 4. https://www.gallup.com/workplace/237113/microsoft-chro-conversation-succession- management.aspx

5. https://www.co.kearney.com/nl/web/guest/financial-services/article/?/a/-home-grown-ceo 6. https://core.ac.uk/download/pdf/287058563.pdf – Talent Management in Multinational Corporations: University of VAASA Finland

7. https://www.schindler.com/com/internet/en/careers/why-schindler/schindler-career- development-program.html

8. https://www.businessbecause.com/news/inside-view-top-jobs/2229/inside-view-schindler- group

9. https://www.schindler.com/ae/internet/en/careers/_jcr_content/iTopPar/downloadlist/ downloadList/19_1461143838452.download.asset.19_1461143838452/people-strategy- brochure.pdf

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