© 2013 Praxis Consulting Group, Inc. All Rights Reserved. Tomorrow's Leaders Today: Investing in leadership development to strengthen business performance

© 2013 Praxis Consulting Group, Inc. All Rights Reserved.

Tomorrow's Leaders Today: Investing in leadership development to strengthen business performance today and prepare for succession in the future

Ted Freeman, Principal, Praxis Consulting Group, Inc.Brian Baker, President, Sentry Equipment Corp.

Midwest ESOP Regional ConferenceSeptember 11-13, 2013

2© 2013 Praxis Consulting Group, Inc. All Rights Reserved. 2

• Why succession planning & leadership development matter

• Link between succession planning & leadership development

• Sentry’s leadership development program

• Sentry’s approach to succession planning

• Where you might start

Session Overview


Leadership, Succession and You

In companies with anyone in a senior position who might leave in the next 3-5 years?

Have succession plans in place for all critical positions?

Have developed systematic programs for deepening leadership capacity in your company?

Explicitly connect Leadership Development and Succession Planning?


Why Succession Planning Matters…

• Manage departures

• Limit disruptions

• Plan for future

• Long-term viability of ESOP, of company


Successors: Internal vs. External

External

• Hard to determine values and management style

• Commitment to EO and reason for it

• Outsider CEOs, most fail within 5 years

• Higher risk

Internal

• Known entity (important for cultural continuity)

• Creates career path for top performers

• Consistent with underlying ownership values


Why Leadership Development Matters…

• Prepare for next generation of leadership

• Enhance performance today

– Close skill gaps

• Enhance ownership culture

– Ownership alone does not improve performance


Succession & Development

Leadership Development

SuccessionPlanning

www.sentry-equip.com

Sentry Background Founded in 1924 by the Henszey

family as a manufacturer of dairy processing equipment

Today - Sampling System Specialists for Gases, Liquids and Bulk Solids“The Sampling Connection”

Known for engineering expertise, with installations in 50 states and over 55 countries


Sentry Products


Sentry Background100% ESOP since 1986175 EmployeesLocated in Oconomowoc, WI – 35

miles west of MilwaukeeAward Winning

◦ Wisconsin Manufacturer of the Year◦ 100 Best Workplaces◦ Wisconsin ESOP Company of the Year

Culture Built Around Employee Ownership


Sentry’s ESOP CultureWorked together to develop

corporate Mission, Vision and Values

Participative management styleFair and generous to employeesShare financial and strategic infoHire people that fit our culture and

will thrive in our environmentLearning and continuous

improvementDesire to develop talent and

leadership


People Development

Lots of 55-60 year old employee owners, including key leaders

Core of young, talented staff◦ No plan to develop them as leaders

◦ Reactive succession planning

Internally developed programs◦ Leadership development events

◦ Succession planning



Training/development events◦ Core competency training

◦ Involve all leaders in strategic planning

◦ Update culture interview questions

Pretty successful!

◦ Middle managers loved involvement

◦ Relevant topics



Well received but needed improvement

◦ Lots of work for executive team

◦ Events, not a comprehensive program

◦ Not tied to succession planning

Need to change approach


Succession Planning

Management team attempted comprehensive program

Miserable Failure!

◦ Little background/education on process

◦ Too comprehensive – will never finish: Process too detailed

Plan for too many people

◦ Focus on people not positions


Regroup/Rethink Build on success/correct

failure What are we trying to

achieve? Strategically identify and

develop people with potential to fill key leadership positions

Teach interpersonal skills for leadership success – tie in ESOP culture, values and core competencies


Next StepsLinked succession planning with

leadership development and moved forward with a comprehensive program

Partnered with Praxis for a leadership development program ◦In depth, professionally presented◦Customized for our goals

Educated ourselves on best practices in succession planning – retooled and streamlined program


Leadership Development Goals

Provide current/future leaders with knowledge, skills and experiences to:◦Know their leadership styles and

understand strengths/pitfalls◦Practical tools for effective

leadership◦Promote ESOP culture, values and

core competenciesFoster strategic thinking,

individual initiative, productive communications and cohesive teams


Sentry’s Leadership Development Program

Phase 1 - four full day meetings in 2013

Includes all supervisory staff (32 people)

Intersession “Cohort Group” meetingsContent

◦Leadership styles◦Fundamental communication skills ◦Goal setting◦Meeting management◦Values in leadership

Reactions & Results…


Succession Planning GoalsContinuity and cultural fitBuild talent at multiple levelsReduce crises of unanticipated

departuresVet capabilities of high potential

employees and future leaders


Sentry’s Succession Planning Process

Identify “Pain Positions”

Identify candidates – “High Potential Employees”

Assess capabilities in terms of Sentry’s Leadership Competencies

Create Individual Development Plans

Track Progress


Improved ProcessHigh level, straightforward

processLimited scope focusing on “Pain

Positions”◦Unique job skills and low depth at

Sentry◦Difficult to recruit◦Key leadership positions

Simple forms


High Potential EmployeesDemonstrates company values and core

competenciesPattern of success in new or difficult

situations and rolesStrong learning agility and driveDemonstrates leadership potentialDrives change; able to influence and

collaborate with othersAbility to represent Sentry well; a

trusted “face” of the organization


Individual Development Plan

Leadership Competencies

Leadership Strengths

Development Needs

Gap Action Plan

Individual Development Plan Ideas


Sentry’s Tips for SuccessLeadership development

◦Let professionals do heavy lifting◦Combine concepts with practical

ideas◦Promote relationships among

leaders◦Multiple touches to enhance

learning


Sentry’s Tips for SuccessSuccession planning

◦Keep process simple and focused◦Don’t make it overwhelming◦Integrate with strategic planning◦Revisit and update regularly


SummaryPresident/CEO’s most important

function – have qualified leaders in place to run the organization

Need leaders that will promote and sustain our culture and corporate goals

Integrated succession planning and leadership development are essential:◦ Get most out of people and ESOP culture

◦GROW STOCK PRICE!!Need to do both effectively!


• Leadership participation – More than “Top leader support”

• Immediate application of content

• Partnership with other leaders

• “Cohort Groups” for continuing education & accountability

Praxis Research: Success Factors for Leadership Programs


1. Pick three positions for analysis

2. Succession

a. If this role were vacated tomorrow, what ready-now talent could step in?

3. Development

a. In the last 18-24 months, what developmental opportunities have people had?

Where to Start?


Questions & Discussion


Leading in an Ownership Context: The Program for CEOs

What is it?

• Co-sponsored by the Employee Ownership Foundation and the University of Pennsylvania

• Designed especially for CEO’s, Presidents and/or their designated successors in EO companies

• Convenes CEOs from across the country

Goals

• Learn about leadership, Learn how to build an EO culture, Build network of EO CEO’s

When?

• June and November 2014


Ted FreemanPrincipalPraxis Consulting [email protected]

Brian BakerPresidentSentry Equipment [email protected]

Documents

© 2013 Praxis Consulting Group, Inc. All Rights Reserved. Tomorrow's Leaders Today: Investing in leadership development to strengthen business performance