CASE STUDY · United Stationers Inc. is North America’s largest broad-line wholesale distributor of business products, with 2007 consolidated net sales of $4.6 billion. The company

CA

SE S

TUD

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IN THIS CASE STUDYGrowing senior management bench strength is a top priority at United Stationers, North America’s largest broad-line wholesale distributor of business products. The company is highly focused on succession planning for senior leadership and top management positions as a keystone of its talent management strategy. The main purpose of succession planning at United Stationers is to provide a strong pipeline of leadership over time for all senior positions in the organization, ensuring continuity of management.

Over the past five years, succession planning at United Stationers has evolved from a paper-based, once-a-year presentation to the board of directors to an automated, formalized and integrated process that occurs throughout the year. Involving a broad spectrum of participants, this new process encourages communication about people development and is linked to other talent management processes.

BERSIN & ASSOCIATES © NOvEmBER 2008 • NOT FOR DISTRIBUTION • LICENSED mATERIAL

BERSIN & ASSOCIATES

FOCUS:

PLANNING& STRATEGY

CONTENTDEvELOPmENT

LEARNINGPROGRAmS

LEARNINGTECHNOLOGY

ANALYTICS &mEASUREmENT

TALENTmANAGEmENT

LEADERSHIP DEVELOPMENT

A Keystone of Talent Management

United Stationers Grows Leadership Bench Strength through Strategic Succession Management

—Kim Lamoureux, Principal Analyst | November 2008

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A KEYSTONE OF TALENT mANAGEmENT

This case study will examine how United Stationers:

• Created a leadership competency model against which employees can be assessed;

• Implemented a comprehensive talent and learning management system, which houses assessment and background data, and is used to complete succession plans online;

• Designed and piloted an individual development planning process for targeted associates to support succession planning and high-performance organization strategy;

• Assesses senior leaders, company officers and 290 top associates on an annual basis;

• Established quarterly succession planning / development discussions at the senior executive level to promote succession planning as an ongoing process rather than as an annual event;

• Identifies high potentials� and potential successors for all senior leadership roles; and,

• Identifies key organizational capability gaps and develops steps to close them. e

� A “high-potential employee” is an employee who has been identified as

having the potential, ability and aspiration for successive leadership positions

within the company. Often, these employees are provided with focused

development as part of a succession plan and are referred to as “HiPos.”



TABLE OF CONTENTS

What Is Succession Management? 5

Company Overview 8

Business Environment 9

Business and Talent Challenges Drive Focus on Succession �0

Business Challenges 11

Talent Challenges 11

Talent Management at United Stationers 13

Leadership Competencies �5

Developing the Model 16

Competencies and Proficiencies 16

Technology �9

Evolution of Succession Planning 20

Change Management 22

Succession Planning Education 22

Senior management and Board-Level Engagement 23

The Succession Planning Process Today 24

Succession Planning Governance and Target Populations 25

Key Components of Succession Planning 26

Data Gathering 27

Career Profiles 27

Assessments 29

Leadership Competency Assessment 30

Talent Assessment 31

Succession Plans 34

Talent meetings 35



Talent Calibration Sessions 35

Board of Director Talent Review 39

Development Planning 40

Organizational / Team Development 40

Individual Development 40

Applying Succession Planning At Non-Executive Levels 41

Talent Management Integration 42

Performance management 43

Pay for Performance 43

Development 44

Business Impact / Metrics 46

Looking Ahead 47

Lessons Learned and Best Practices 48

make Succession Planning a Priority for the Board of Directors 48

Get Buy-in from Senior management along the Way 48

Best Practices 49

Conclusion 49

Appendix I: Introduction and Overview 51

Appendix II: Executive Assessment Summary 52

Appendix III: Executive 1 Assessment Summary 53

Appendix IV: Executive Succession Plans 54

Appendix V: Table of Figures 55

About Us 56

About This Research 56



Figure 8: High Impact Talent Management Framework®

What Is Succession Management?2

Before we delve into the specifics of this case study, we need to step back for a moment and take a closer look at succession management. In this section, we will discuss this emerging focus on succession management, addressing what it is, the different levels of maturity and why it is important for organizations today – and in the future.

Talent management and succession management are terms that are widely used interchangeably. In our definition, succession management is just one component of a company’s overall talent management strategy. (See Figure 1.)

2 For more information, The Emergence of Succession Planning as a Critical

Talent Process, Bersin & Associates / Kim Lamoureux, July 6, 2007. Available to

research members at www.bersin.com/library.

Figure 1: High-Impact Talent Management Framework®

Source: Bersin & Associates, 2008.

Co

mp

en

satio

n

Talent Strategy & Planning

Critical TalentStrategy

Target Metrics& Measurement

ProcessGovernance

SystemsStrategy

BusinessStrategy

PerformanceManagement

Goal-SettingCascading GoalsSelf-Assessment

Manager Assessment360 Assessment

Development PlanningCompetency Assessment

Sourcing &Recruiting

SourcingCandidate Pools

AssessmentEmployer Brand

RecruitingSelection

Career and Succession

ManagementCalibration Meetings

Talent ReviewsHiPo Identification

Career PlanningTalent Migration Plan

Formal ProgramsStretch AssignmentsExecutive Education

CoachingMentoring

Job RotationAssessmentEvaluation

LeadershipDevelopment

HR

Sys

tem

s&

Metr

ics

Competency Management LeadershipCompetencies

FunctionalCompetencies

CorporateValues

JobProfiles

Co

mp

ensatio

nPlan

nin

gB

ase Co

mp

ensatio

n

Plans

Pay for

Perform

ance

Sho

rt- and

Lo

ng

-TermIn

centivesLearning and Development

Onboarding ManagementTraining

LeadershipCurricula

Coaching / Mentoring Programs

Role-BasedCurricula

CertificationPrograms

OperationalTraining

LearningStrategy

DevelopmentalAssignments

Content Developmentand Delivery

e-

www.bersin.com/library



Figure 2: Bersin & Associates Succession Management Maturity

Model

Succession management (also called “succession planning” by many companies, such as United Stationers) refers to an organization’s processes for identifying, selecting and managing successors, as well as the processes of career planning and talent migration.

While succession management has been around for a long time, the value of and approach to succession management has evolved. Like most functions within talent management, succession management has matured to become a strategic vehicle that enables organizations to create a competitive advantage through talent. Figure 2 illustrates the multiple Levels of Maturity as defined by Bersin & Associates.�

Companies do not have to move through these levels successively. Instead, a company can create a strategy for the highest Level of Maturity, with the understanding that it may take years to achieve; a company must progress through each element within the desired Maturity Level. The following is a brief description of each Level of Maturity.

3 For more information, Transforming an Organization through Talent

Management: Succession Planning at Mercer, Bersin & Associates / Kim

Lamoureux, July 2008. Available to research members at www.bersin.com/library.

Succession

management refers

to an organization’s

processes for

identifying, selecting

and managing

successors, as well as

the processes of career

planning and talent

migration.

K E Y P O I N T

Figure 2: Bersin & Associates Succession Management Maturity Model®


Succession ManagementBusiness Strategy Alignment, Talent Management Integration, Enterprise Perspective, Owned by CEO

Succession PlanningDevelopment Plans, Talent Reviews, Business-Unit Focus,

Targets Key Positions, HR-Driven

Replacement PlanningList of Senior-Level Positions, List of High Potentials, No Development

Executive DevelopmentDevelopment of Successors of Executive-Level Positions

http://www.bersin.com/library



1. Executive Development – The first level for which companies only focus on the very top of the organization, is typically to ensure a replacement for the CEO. Development plans are put into place for these executives, which may include coaching and executive education programs.

2. Replacement Planning – In the second level, organizations take the first attempt at identifying who their high potentials� are within the company, and trying to match those individuals to either specific jobs or job types. However, companies at this Level fail to develop their high potentials, so that they will be ready to take on these successive positions. There is a false sense that high potentials will be ready for successive roles, and the company does not have the kind of learning and development (L&D) culture that is required.

3. Succession Planning – This third level is where many companies are today. They have identified all of the critical positions within the company, they are conducting talent review sessions and development plans are being put in place (likely linked through a performance management process). The view of talent is still primarily at the business-unit level and the program is still very HR-driven.

4. Succession Management – The fourth level is where companies are striving to be today. More than identifying critical positions, companies are developing the right people for every job. They are able to do this because they have an “enterprise view” of talent – these companies are not limiting replacements by function, business or geography. Succession management is owned by the CEO and executive team. In other words, these executives are highly engaged and are setting expectations for the process to be effective. Finally (and this is very important), succession planning is highly aligned to the business strategy. Companies at this Level are not just “looking” at the replacement of current positions, they are preparing for future business needs – and taking into consideration factors, such as restructuring, growth and new product lines.

4 A “high-potential employee” is an employee who has been identified as

having the potential, ability and aspiration for successive leadership positions

within the company. Often, these employees are provided with focused

development as part of a succession plan and are referred to as “HiPos.”

Companies do not

have to move through

each Level of maturity

successively; however,

achieving the higher

Levels of maturity may

take years.

K E Y P O I N T



Further, succession management is aligned with other talent management processes, including performance management, L&D and career development. Performance management provides data regarding individual performance and development; succession management must drive the kinds of learning and development activities that are made available to high potentials, so that they are ready for successive positions; and, career development plans are indicative of an individual’s career aspirations and the kinds of experiences that are necessary for growth within a defined career path.

Bottom line is that what was originally a list of names of possible candidate replacements for senior-level positions (and only discussed at the “CEO Table”�) is now a set of practices (not necessarily done sequentially) for identifying high-potential talent to fill senior-level and other key positions within the company.

Company Overview

United Stationers Inc. is North America’s largest broad-line wholesale distributor of business products, with 2007 consolidated net sales of $4.6 billion. The company stocks more than 100,000 items from approximately 1,000 manufacturers. This includes a broad and deep selection of technology products, office products and furniture, janitorial and break room supplies, and industrial products.

The company has 67 distribution centers through which it provides a high level of customer service, and same- or next-day delivery to more than 90 percent of the U.S. and major cities in Mexico. Its focus on operational excellence has given the company:

• An average line fill rate of better than 97 percent;

• A 99.6 percent order accuracy rate; and,

• A 99 percent on-time delivery rate.

5 “CEO table” refers to the CEO and his / her direct reports, and / or other

individuals considered to be advisors to the CEO.



United Stationers primarily serves commercial and contract office products dealers and industrial product distributors. Its customer base includes more than 30,000 resellers – such as office products dealers; contract stationers; office products superstores; computer products resellers; office furniture dealers; mass merchandisers; mail-order companies; sanitary supply, paper and foodservice distributors; drug and grocery store chains; e-commerce merchants; oil field, welding supply and industrial / MRO distributors; and, other independent distributors.

Business Environment

United Stationers comprises three primary operating businesses (see Figure 4). United Stationers Supply Co. is the office products business founded in 1922. Seeking diversification, growth and synergy, the company acquired LagasseSweet, Inc. (Lagasse), a wholesaler of janitorial and sanitation supplies, in 1996. Another major acquisition, ORS Nasco, was completed in 2007. As a supplier of industrial, MRO (maintenance, repair and operations), safety, construction, welding and oilfield supplies, ORS Nasco opens up new market opportunities for United Stationers.

Figure �: United Stationers at a Glance

• Year founded: �922

• Annual Revenue: $4.6 billion (FY 2007)

• Total employees: 6,000+

• Headquartered: Deerfield, Illinois

• Stock Symbol: NASDAQ Nm: USTR

Source: United Stationers, 2008.

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Figure 4: Major Business Lines

What all three business units have in common are state-of-the-art distribution capabilities and innovative marketing programs that can be leveraged across business lines. The corporate functions and staff exist to serve the 67 regional distribution centers. In fact, the headquarters (located in a suburb of Chicago) is referred to as the “field support center.”

Business and Talent Challenges Drive Focus on Succession

At United Stationers, the strategic direction of the business drives the requirements for leadership competencies, skills and experiences. United Stationers believes that its succession management program will help it overcome a number of business and talent challenges that are critical for the company’s long-term success – in particular to build new people capabilities.

The challenges that United Stationers faces are described in the following sections.

Figure 4: Major Business Lines


United Stationers

Finance

United SupplyIT

LagasseSweet

HR ORS Nasco

Operations

Legal

Sales

Operations

Sales

Operations

Sales

At United Stationers,

the strategic direction

of the business drives

the requirements

for leadership

competencies, skills

and experiences.

BEST PRACTICE

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Business Challenges

From a business perspective, there are two major challenges.

1. Increasing Business Growth – As the company grows larger, as well as more complex and diversified, the expectations for senior leaders have risen and will be even greater in the future. In addition, accountability is expanding from the CEO to other senior business leaders, including the business-unit presidents and senior vice presidents. As a result of these changes, senior leaders need to possess a broad range of job experiences across the company to be highly effective.

2. Leveraging Synergies – Having the right senior leaders will enable United Stationers not only to meet the top-line growth challenge, but also to unlock the value of its acquisitions. This means leveraging synergies across existing customer bases, supply chains and shared overhead services (like HR and IT), as well as driving out waste in supply chains and optimizing the use of physical assets (such as warehouse facilities).

Talent Challenges

On the talent front, three challenges have emerged.

1. Increasing General Management Experience – The company needs more vice presidents, directors and senior managers with general management experience, in addition to expertise in a single function. A relatively small number of people have served in a management capacity in multiple parts of the company. However, those who have done so, have been able to manage the entire business with good results. For example, one of the three current business-unit presidents began his career at United Stationers as a supply operations leader.

United Stationers faces

two common business

challenges in today’s

economy – increasing

business growth and

leveraging synergies.

K E Y P O I N T

United Stationers’s

talent challenges

include the

development of

general management

and other specialized

skills, as well as

being prepared for

talent shortages that

could result from

demographic changes

and business growth.

K E Y P O I N T



2. Developing Specialized Skills – Leadership identification and development are needed to implement specific strategic objectives and support key initiatives, such as the adoption of Six Sigma� and LEAN� techniques. In addition to forming high-performance teams to tackle customer issues, United Stationers created a council that identified 50 independent opportunities for LEAN interventions that can have a major impact on the business.

One other important example of a business initiative that requires new leadership capabilities is the company’s drive to enhance sales and marketing through technology. United Stationers is in the process of rolling out a new web-based system that gives more than 20,000 reseller customers better visibility into inventory, pricing, marketing materials and more.

3. Addressing Internal Talent Shortages – An external driver of talent management and succession planning at United Stationers is the need to meet anticipated recruiting challenges. Demographic trends indicate only those companies that are proactive in their recruitment and development efforts today will avoid the pains which many companies will experience as the workforce shrinks in the next five to seven years.

As new roles are created due to growth, United Stationers will need to bring in talent from the outside. However, to ensure that the company does not face a future “talent shortage” as experienced executives retire or leave through attrition, United Stationers must identify internal potential future business leaders, and provide them with development and cross-functional exposure.

6 “Six Sigma” is a business-driven, multifaceted approach to process

improvement, reduced costs and increased profits. With a goal of improving

customer satisfaction by reducing defects, Six Sigma’s ultimate performance

target is virtually defect-free processes and products. For more information on Six

Sigma, please visit http://www.sixsigma.com, which offers articles and easy-to-read

examples of how to apply Six Sigma to any business process.7 The goal of “LEAN” in an office environment / administrative capacity (such

as at United Stationers) is to target those activities that do not add value (such as

overproduction, underutilized people and extra processing), and then eliminate,

reduce, simplify or integrate those activities or processes.

One of United

Stationers’ strategic

objectives is to become

a high-performance

organization. Growing

strong leaders is a

critical component of

this goal.

BEST PRACTICE

http://www.sixsigma.com



Figure 5: United Stationers’s Talent Management Organization

As the company continues to mature, it believes a key to success will be its focus on the development of internal high-potential resources.

Talent Management at United Stationers

Contextually, succession management is only one component of a larger talent strategy. Therefore, before diving deep into United Stationers’ succession management process, we want to provide you with a brief summary of the company’s overall talent management framework.

The focus on talent management began in 2002, with the design of the succession planning process and continued in 2003, with the hiring of internal resources to focus on talent management efforts. Talent management at United Stationers is housed in the development and training organization (see Figure 5), and is responsible for a total of 6,000 associates, broken down as follows:

• In the warehouse / distribution network – 4,500; and,

• Professionals – 1,500 (including about 290 senior-level managers and above).

Figure 5: United Stationers’s Talent Management Organization


VP, HR – Compensation, Benefitsand Development

Manager, HR – OrganizationDevelopment and Training

Training Publications Specialist

Training and LMS Analyst Sr. Training and LMS Analyst



Because talent management and organizational development capabilities are housed in the same group as training, a natural integration point exists between the identification of individual, team and organizational gaps – and in finding training and other development solutions to close these gaps.

The talent management function is responsible for the following key areas overall.

• Succession planning

o Process design, administration and support

o Additional process support for leadership teams (calibration support, action planning support, et al)

• Leadership development

• Talent management

o Functional talent management support (organization assessment, competency design, et al)

• Individual Development

o Development planning

o Training

• Team development

• Organization development

o Organizational capability gaps

o Strategies and solutions to close gaps

The team also interfaces closely with recruiting, diversity and compensation (which owns the performance management process) to ensure that different components of talent management integrate fully with related associate efforts.

HR generalists in the field support corporate talent management processes by providing expert guidance to local leaders – driving completion of talent management tasks and providing feedback on the process. In addition to supporting corporate efforts, the HR generalists



also perform related talent management design and development work that benefits the functions / locations that they support.

Leadership Competencies

Leadership competencies are foundational to all aspects of talent management. When these defined competencies are consistently demonstrated, it should lead to high-performance outcomes in an organization.

A competency model is a framework or list of competencies, often organized into multiple groupings or clusters, which are attributable to desired employee performance. e

An important step in the development of a consistent and strategic succession planning process is to clearly define the skills, capabilities and actions required of effective leaders. This competency model is particularly important to succession management because it helps to:

• Define job profiles of critical positions;

• Evaluate and identify future leaders;

• Assess individual, team and organizational skills gaps; and,

• Enable the creation of focused development plans to ensure the readiness of high-potential associates for successive roles.

There are several benefits for having defined leadership competencies, including:

• Creates clear expectations for behavior and performance in the role;

• Defines high potential and succession requirements that take a forward look;

• Helps associates understand how to develop to achieve a leadership position;

Leadership

competencies are

the attributes,

skills, behaviors and

knowledge that

organizations use to

assess and develop

leaders.

K E Y P O I N T



• Creates a common language around which to provide feedback and coaching;

• Establishes a companywide framework that can help in making successful lateral-move assignments; and,

• Defines a single set of criteria (and, therefore, a fair and consistent message) for all of a leader’s employment processes (such as selection, succession, assessment and development).

Developing the Model

At United Stationers, a competency model was developed with input from all key constituencies in the business. This was not just an HR exercise. First, members of the executive team identified the competencies needed to take United Stationers to the “next level” of performance. Then, focus groups were conducted to obtain input about required competencies from representative associates in different functional areas and regions.

Experts in the field of competency applications were consulted to ensure the competencies were comprehensive yet distinct, and the information was integrated into a coherent model. Finally, in 2003, the model was validated and refined through additional focus groups and interviews.

Competencies and Proficiencies

The Leadership Competency Model at United Stationers (see Figure 6) contains 12 competencies – grouped into four clusters that represent major job challenges for leaders at United Stationers. The groupings allow for simpler identification of the broad strengths or development requirements of individuals and teams at United Stationers.

8 For more information, Competency Management: Gateway to an Integrated

Talent Strategy, Bersin & Associates / Kim Lamoureux, February 2008. Available to

research members at www.bersin.com/library.

Executives and

business leaders at

United Stationers

played a significant

role in defining the

competencies to help

the company deliver

on its business strategy.

BEST PRACTICE

United Stationers

applies a “catch-all”

leadership competency

model, whereby

one core set of

competencies is applied

to all leaders in the

company regardless of

position or level.�

K E Y P O I N T

www.bersin.com/library



Each of the 12 competencies is defined in terms of five levels of proficiency, with the lowest level of each competency representing “no proficiency.” These proficiency levels (see Figure 7) are representative of the behavior or action that someone displays in that competency area only. It is the overall pattern or balance of competencies displayed that leads to high performance. Different targets are set within the model, however, based on a person’s level within the organization. An excellent performer can have areas of weakness and a weaker performer usually can have areas of strength.

Figure �: Leadership Competency model

Strategic Thinking

Leading Associates

Results Orientation

Interpersonal Effectiveness

Industry and Business

Awareness

Inspiring Ownership of

the Vision

Business / Functional Expertise

Effective Communication

Identifying and Defining

Business Opportunities

Developing Organizational

Talent

Creating and Communicating

Expectations

Building Constructive Relationships

Formulating a Vision

Empowering Others

Represents the Customers’

Views

Demonstrating Company

Values


To ensure the right

competencies are being

addressed, United

Stationers reviews and

updates them on a

regular basis.

BEST PRACTICE

Leadership

competencies reflect

each organization’s

unique belief system

about what type

of people should

be leading the

organization.

A N A LY S I S



In 2007, United Stationers reviewed and revised the Leadership Competency Model to ensure its continued relevance. The company added language that reflects the organization’s focus on process excellence and cross-functional collaboration. According to the vice president of human resources, the model has “… gained credibility and is on the cusp of being institutionalized.” For example, when hiring or selecting new managers, a behavioral-based interviewing approach (founded on its leadership competency model) is used.

9 For more information, Competency Management: Gateway to an Integrated

Talent Strategy, Bersin & Associates / Kim Lamoureux, February 2008.

Figure �: Example of Proficiency Levels

Below is an example of the proficiency levels associated with the competency “Customers’ Views.”

Definition of Competency: Keeps the needs of United Stationers’s customers first and foremost in the leader’s mind, and in his / her organization. Encourages customer advocacy in all associates through their discussions and leadership. Considers the voice of the customer (internal and external) in all actions.

Level �: Does not consistently and effectively demonstrate competency at the minimum level.

Level �: Understands the current and most critical, changing needs of the customer, and responds to all customer issues as they arise. Ensures that customers’ immediate needs are met in his / her organization.

Level �: Anticipates customer needs and is truly the voice of the customer within United Stationers. Recovers effectively from a service failure. Engages in interactions with customers that go beyond completing transactions in order to understand their business challenges. Delights the customer by delivering unspoken customer requirements.

Level �: Commits to – and achieves – high levels of customer satisfaction in the face of adversity. Is a trusted advisor to customers on their current and future strategies.

Level �: Makes the customer’s perspective a priority when other immediate concerns within United Stationers may conflict with it. Compares the voice of the customer with the voice of the process to assess current performance and capability as it relates directly to the customer. Identifies future opportunities for the customer to develop his / her business and advises the customer accordingly. May incur short-term costs for long-term customer retention.


According to

our research,

organizations that

review and update

their competencies

on a yearly basis

have a higher

degree of business

impact from their

application in various

talent management

processes.�

A N A LY S I S



Technology

United Stationers uses an integrated talent and learning management software solution to track and manage all talent-related information. The software-as-a-service (SaaS)�0 talent management suite approach appealed to the organization, which wanted to maximize the amount of data that could be worked with and viewed directly by managers at United Stationers. The vendor hosts the software applications and stores all data, which are delivered on-demand to users via the Internet.

United Stationers stores the following talent management data in the Cornerstone OnDemand system.

• Training

o Registration, delivery, tracking, evaluation and reporting of courses

o Transcript management and reporting

• Competency Assessment

o Assessment and reporting of functional competency models

o Performance review forms

• Succession Planning

o Associate career profiles

o Leadership competency and talent assessments

o Succession plan completion and reporting

(See section, “Key Components of Succession Planning,” for more information.)

�0 “Software as a Service” (or SaaS) refers to the business of selling software over

the Internet as a web service. In this business model, the software vendor charges

an annual “rental” fee and can predict recurring revenues far more reliably than

with the licensed software model. As SaaS becomes proven and the delivery

strategies more refined, most analysts agree that more and more enterprise

software will be sold in this way.

Technology should not

drive the succession

planning process; but,

rather, it is a critical

enabler for the process

to be successful,

particularly in terms

of data integrity and

accessibility.

A N A LY S I S

Because of United

Stationers’s ability

to influence the

succession planning

application, the

company did not fall

into the trap of the

system driving the

process.

BEST PRACTICE



• Performance Management

o Creation, tracking and reporting of annual performance goals

o Mid-year and year-end performance reviews

• Development

o Creation and tracking of individual development plans

o Information through documentation sharing

• Survey Administration

o Delivery and tracking of internally designed surveys

o Creation and tracking of annual compliance and certification requirements.

The company began discussions with Cornerstone OnDemand in 2002, when the vendor was in start-up mode and looking for major enterprise customers to give it credibility in the marketplace. Due to this timing, United Stationers was able to influence the design of the Succession Planning module.

Evolution of Succession Planning

United Stationers defines succession planning as,

“… a process to ensure leadership strength and continuity in key positions, and to encourage individual development

to enable us to execute on our strategic initiatives.”

Prior to 2002, the succession planning process was informal, and limited in both scope and effectiveness. There were no leadership succession plans in place and no consistent assessment of leaders. The company also lacked a formal way to “groom” talent. The workforce was characterized by long-tenured leaders who had strong experience in functional / company silos, but lacked broader general management expertise.

In 2002, the company initiated a succession planning program for senior leadership. By 2004, the target population for succession

Recognizing the

business need for

succession planning is

a critical first step for

engaging and gaining

the support of senior

leadership.

A N A LY S I S



planning encompassed all officers and top managers in the company, as well as any senior-level managers and directors.

Over the following four years, succession planning evolved into its current framework as various program components were developed (see Figure 8). These elements included:

• A leadership competency model (see Figure 6, section “Competencies and Proficiencies”);

• A process and tools for assessing leaders based on their promotability, strengths and development needs;

• The creation of formal succession plans; and,

• The introduction of an integrated talent management system.

Most recently, in 2007, the following enhancements were made to United Stationers succession planning program.

• Established a mid-year succession planning / development discussion at the senior executive level to promote succession planning as an ongoing process rather than as an annual event.

• Restructured the calibration process to reflect the new organizational structure. Succession planning discussions now take place at the

Figure �: Succession Planning Process Evolution

In 2002 2003 to 2006

• No leadership succession plan in place

• No consistent assessment of leaders

• No formal way to “groom” talent

• Long-tenured workforce

• Functional / company silos

• Developed Leadership Competency Model

• Assessed leaders on promotability, strengths, development needs and retention risks

• Created formal succession plans

• Introduced Cornerstone software system


Succession planning is

an iterative process,

and this can take

multiple years before

an organization

matures in its ability

to discuss, develop and

share talent.

A N A LY S I S

United Stationers

recognized that

a change in its

organizational

structure required

modifications and

enhancements to the

company’s succession

planning processes.

BEST PRACTICE



leadership team levels (Tiers 1 and 2), resulting in conversations and follow-up actions occurring at the appropriate level of the organization. (For a description of the leadership teams, see Figure 9.)

• Reviewed and revised the Leadership Competency Model to ensure continued relevance. Added language that reflects the organization’s focus on process excellence and cross-functional collaboration.

• Solidified a high-potential development pilot program. (See section, “Development,” for more information.)

Change Management

With a complex initiative (such as succession planning), there are steps that must be taken to ease its impact on the organization. Managers and other employees need to understand what succession planning is, what their roles are, and how it will affect their jobs or careers. Without any type of change management effort, the focus becomes wrapped up in the small details, and a level of fear could set in leading to resistance and a difficult adoption. Two approaches that United Stationers used to manage this change included:

• Educating all employees involved in succession planning about the process; and,

• Relying on the engagement and support of senior leaders and the board of directors.

Both of these approaches are described in the following sections.

Succession Planning Education

In 2004, when United Stationers first launched its newly expanded succession planning process, the company delivered instructor-led training (ILT) for all employees in the targeted population (exempt grades one through nine). The curriculum included:

Frequent and honest

communication is an

effective tactic for

keeping people at ease

in the face of change.

K E Y P O I N T



• An overview of the succession planning process and leadership competencies;

• Guidance on how to use the Leadership Competency Model and talent assessment to accurately assess associates (see section, “Assessments”);

• Direction for calibrating assessments to ensure consistency in the application across the organization;

• Instruction on how to fill out career profiles;

• Advice for managers on what to say and what not to say during performance and career discussions; and,

• A suggested script for relaying information related to an individual’s potential and possible next positions.

All of the classroom training has since been converted to online courses delivered by the integrated talent management system (see section, “Technology”).

Senior Management and Board-Level Engagement

The senior leadership team (SLT), leadership teams and the board of directors all “embrace” and support the executive succession planning process. They have been active participants in the design of the process and also see the value of the process, especially in meeting the requirements of business drivers and closing organizational / team competency gaps.

The vice president of human resources admits that it can be challenging to get senior leaders to think collectively, and that succession planning may not come naturally to those whose first priority is to focus on revenues, customers and critical business requirements. However, the vice president reports that senior leaders are very engaged and focused throughout the all-day calibration sessions and the one to two-hour follow-up meetings.

�� For more information, Executive Development: A Critical Component of a High-

Impact Leadership Development Strategy, Bersin & Associates / Kim Lamoureux,

April, 2008. Available to research members at www.bersin.com.library.

Educating managers

and other employees

involved in succession

planning removes

the “fear of the

unknown,” and

enables a quicker

adoption.

BEST PRACTICE

According to our

research, board of

director participation

enhances learning and

development, increases

strategic alignment

and improves the

level of employee

engagement.��

A N A LY S I S

htto://www.bersin.com.library



Engagement is aided by the fact that the senior leadership team leads by example and they have high expectations that executives will come prepared to the calibrations meetings. Peer pressure and encouragement from the CEO ensure that participants are involved, and ready to discuss their peers and direct reports.

The Succession Planning Process Today

United Stationers has redefined the purpose and objectives of its succession planning program – to increase bench strength, and get the right level of talent in the organization to build and acquire businesses and support profitable growth. The program has four overall goals:

• Establish core competencies for leaders that support business requirements and company values;

• Identify organizationwide strengths and developmental areas;

• Identify and prepare future leadership talent; and,

• Identify high-potential employees.

The succession planning process at United Stationers is guided by an overarching set of principles developed and articulated by HR and the senior leadership team, which includes:

• One process throughout the company;

• Management commitment at all levels;

• Shared resources across functions and divisions;

• Career and project leadership opportunities for those with high potential;

• Shared ownership of development responsibility;

• Continuous improvement / upgrading of the talent pool;

• Cross-functional / cross-divisional movement where appropriate;

• Creation of a development culture through mentoring and coaching; and,

• Diverse talent included as part of the process and outcomes.

It can take years to

develop a culture that

embraces succession

planning and for

managers to be good

at assessing talent.

A N A LY S I S

The succession

planning process at

United Stationers

is guided by an

overarching set of

principles developed

and articulated by

HR and the senior

leadership team.

K E Y P O I N T



Succession Planning Governance and Target Populations

At the highest level (which targets executives), the succession planning process is sponsored and governed by the CEO and the senior vice president of HR, who are responsible for making a final presentation of the executive-level succession plan to the board of directors. (See section, “Board of Director Talent Review,” for more information about this presentation.)

Senior leaders are required to manage succession plans and executive development in their areas of responsibility. Governance and management of the succession planning process and subsequent calibration sessions cascade down through the organization (see Figure 9).

As shown above, the CEO, CIO, CFO, senior vice president of HR, general council and the three business-unit presidents comprise the senior leadership team (Tier 1). The SLT oversees and calibrates succession planning for the five leadership teams (Tier 2), which represent the three main business units and two key corporate functions

Figure �: Succession Planning Governance and Target Populations

Tier 1Senior Leadership Team

CEO, CIO, CFO, SVP HR, General Council and Company Presidents

Tier 2

United Supply Leadership

Team

President + VPs

Lagasse Leadership

Team

President + VPs

ORS Nasco Leadership

Team (effective

�00�)

President + VPs

IT Leadership Team

CIO + VPs

Finance Leadership

Team

CFO + VPs

Tier 3~ ��0 Senior Level Employees

(Directors, General Operations Managers, District Sales Managers)




(IT and finance).�� In 2008, executive succession plans for Section 16 Officers�� on the leadership teams and the senior leadership team were presented to the board of directors. (See section “Board of Director Talent Review”.)

The five business unit / functional leadership teams (Tier 2) govern and calibrate succession planning for the larger targeted population of approximately 230 senior-level employees (Tier 3), including all directors, general operations managers and district sales managers. Succession plans for these positions are not presented to the board of directors.

(See section, “Senior Management and Board-Level Engagement” for more information.)

Key Components of Succession Planning

There are three major components of the succession planning process at United Stationers. They include:

1. Data Gathering

• Career profiles

• Leadership competency and talent assessments

• Succession plans

2. Talent Meetings

• Talent calibration sessions

• Board of director talent review

�2 The functions of the HR and legal departments are also included in United

Stationers’ succession planning process; however, these functions are small and

are not discussed independently as are IT and finance.�3 “Section �6 Officer” means “officer” as defined in Rule �6a-�(f) under the

Securities Exchange Act of �934, and includes the president, the principal financial

officer, the principal accounting officer, or any vice president in charge of a

principal business unit, division or function (such as sales, administration or finance).

Consistency creates

credibility and allows

for a process to

mature. A strong

governance model can

provide this kind of

necessary structure.

A N A LY S I S

Three components to

succession planning

at United Stationers

include data gathering,

talent meetings and

development planning.

K E Y P O I N T



3. Development Planning

• Individual development

• Organizational development

Each of these elements of succession planning is described in the following sections.

Data Gathering

Career Profiles

All employees in United Stationers’s “targeted population” for succession planning are required to fill out and update their career profiles (see Figure 10). This online résumé includes work experience, educational history, key accomplishments, career aspirations and openness to relocation. The data is stored in the integrated talent management system.



Figure 10: Career Profile – Key Accomplishments

This information is pulled from the career profile to populate an individual profile (see Figure 11) that direct managers and executives can review as they complete the multiassessment and succession planning components.

Figure 10: Career Profile – Key Accomplishments


Career profiles enable

employees to share

personal information

that may not be

captured otherwise. As

a result, unique skills

sets can be more easily

discovered.

BEST PRACTICE



Assessments

Assessments are an effective means for associates at United Stationers to share valuable information about themselves and for the company to learn more about its employees. Self-knowledge and awareness of one’s own strengths and deficiencies are hugely critical factors for an individual’s success. Assessments enable managers to create developmental opportunities for their associates that align more closely to their skills gaps and potential.

United Stationers implements two types of assessments:

1. Leadership Competency Assessment – That assesses employees against competencies; and,

2. Talent Assessment – That assesses strengths and development needs (beyond the competency model), potential and retention risk.

Both of these assessments are described further in the following sections.

Figure 11: Individual Profile


Assessments enable

managers to create

developmental

opportunities for

their associates that

align more closely to

their skills gaps and

potential.

K E Y P O I N T



Figure 13: Competency Assessment Summary

Figure 12: Competency Assessment Form

Leadership Competency Assessment

The talent management system provides managers with online forms for completing competency assessments (see Figure 12) using the aforementioned Leadership Competency Model.

The software also provides managers with a graphical summary view of the employees competency scores (see Figure 13).

Figure 12: Competency Assessment Form


Figure 13: Competency Assessment Summary


Assessments at

United Stationers

are completed in

an online form that

enables data to be

aggregated and

reviewed at a team or

organizational level.

BEST PRACTICE



Figure 14: Overall Competency Rating

The final result is an overall competency rating that is based on the average weighted score (see Figure 14).

Assessment data is stored in the talent management system, enabling direct managers to get a long-term view of an employee’s performance.

Talent Assessment

The talent assessment helps managers and executives to define the potential of an individual. Whereas performance is assessed in the company’s performance management process, potential is assessed in succession planning (see Figure 15). According to Bersin & Associates,

“… a high potential is an employee who has been identified as having the potential, ability and aspiration for

successive leadership positions within the company.”

Figure 14: Overall Competency Rating


Through ongoing

conversations with

companies, we have

found a correlation

between long-

term performance

and potential, and

succession.

A N A LY S I S

Bersin & Associates

defines a “high

potential” as an

employee who has

been identified as

having the potential,

ability, and aspiration

for successive

leadership positions

within the company.

K E Y P O I N T



Figure 15: Performance Versus Potential

The talent assessment focuses on four key areas.

1. Promotability and Potential (see Figure 16) – Potential is based on an associate’s ability to advance two levels or to become a vice president within the next five years. Promotability is measured on a five-point scale (which is shown in Figure 16 and described in “Appendix I: Introduction and Overview”).

2. Key Strengths – Areas in which an associate excels.

3. Development Needs – Areas in which an associate needs to improve.

4. Retention Risk (see Figure 17) – The degree of risk that an employee will leave the company. There are three levels of risk – high, medium and low.

a. High – Likely to leave without a compelling reason to stay. The associate may be highly marketable, unsatisfied in his / her role, or a low fit with the company values and culture.

b. Medium – May leave for another opportunity or for personal reasons. The associate may have some skills that are marketable or not fully satisfied in his / her role.

Figure 15: Performance Versus Potential


PotentialFuture Role

Succession Planning

LeadershipCompetencyAssessment

FunctionalCompetencyAssessmentValues / Skills

Assessments

SuccessionPlans

Performance Management

PerformanceCurrent Role

PromotabilityAssessment

GoalAchievement



Figure 16: Talent Assessment – Promotability Rating

Figure 17: Talent Assessment – Retention Risk

c. Low – Unlikely to leave United Stationers. The associate may not have marketable skills, is highly satisfied in his / her role, or may have a strong fit with company values and culture. United Stationers

talent assessment

focuses on four

key areas – a

potential, strengths,

development needs

and retention risk.

K E Y P O I N T

Figure 16: Talent Assessment – Promotability Rating


Figure 17: Talent Assessment – Retention Risk




Succession Plans

Managers are responsible for creating a succession plan with up to nine potential successors for each position that reports to them. With the information obtained through the career profiles and assessments, managers are able to search for and select successors directly from the database. In addition to work experience and assessment data, managers can see the career aspirations and relocation preferences of their associates. However, managers cannot access profiles and assessment data of employees who do not report to them directly.

There are two approaches that a manager can use to identify talent outside of his / her immediate area. The manager can approach the HR department directly and ask for recommended associates who have the skills sets that match with a specific job profile – or, they can contact other managers directly to inquire about talent. According to the manager of organizational development and training,

“We encourage conversations between peer managers. They really stretch each other’s thinking around

who can do what.”

The succession plans are built around three timeframes (see Figure 18):

1. Immediate;

2. One to three years; and,

3. Long term.

Managers are encouraged to identify successors in all three timeframes.

Due to the

confidential nature of

succession planning

data, managers at

United Stationers can

only access profiles

and assessments for

their direct associates.

BEST PRACTICE

Identifying successors

in various timeframes

will create a stronger

leadership pipeline

and increase a

company’s bench

strength.

BEST PRACTICE



Talent Meetings

Talent Calibration Sessions

According to Bersin & Associates, talent calibration is an opportunity for companies to bring together managers (who are peers) to finalize ratings and potential assessments of all salaried employees in their groups. In these meetings, employees are comprehensively calibrated against their peer group and evaluated on defined criteria that typically includes:

• Performance relative to objectives;

• Demonstration of leadership competencies; and,

• Individual development.

For clarification, talent calibration sessions at United Stationers actually take the form of what many companies refer to as “talent reviews.” According to Bersin & Associates,

“… a talent review is a meeting to engage key business leaders in sharing and discussing talent information.”

Figure 18: Exempt Employee Succession PlansFigure 18: Exempt Employee Succession Plans


Talent calibration is

an opportunity for

companies to bring

together managers to

develop a collective

understanding of the

bench strength.

K E Y P O I N T



Figure 19: Calibration Meeting Participants

Compared to talent calibration sessions, attendees are more senior, and data and corresponding conversations cover a larger span of the workforce.

Talent calibration meetings at United Stationers have two principle purposes:

1. A systematic way to promote assessment accuracy and organizational consistency at several points during the succession planning process; and,

2. A way to facilitate initial discussions about developmental opportunities, including lateral and promotional position changes, outside of an associate’s immediate area.

The calibration meetings have the added benefit of allowing participants to get a broader view of the organization beyond their own functional silo. A typical meeting will include discussion of up to three levels of management, including peers (see Figure 19).

As added by the manager of organizational development and training,

“This is where the most value comes from calibration sessions … The calibration sessions provide a much broader view of the associates to consider for open positions … to think

outside of the box and look at people from across functions who at first glance may not seem like a fit.”

Figure 19: Calibration Meeting Participants


Who Attends / Hosts the Calibration Meeting

Who Is Discussed at the Calibration Meeting

Attend CalibrationMeeting to Discuss

Direct Reports

E9+Associate

Boss

Peer

E9+DirectReport

Peer You HRPeer

E9+DirectReport

E9+DirectReport

E9+DirectReport

E9+DirectReport

E9+DirectReport

Host CalibrationMeeting to Discuss

Associates

E9+Associate

E9+Associate

E9+Associate

E9+Associate

E9+Associate

Talent calibration

meetings provide

a mechanism for

getting a balanced

view of each person

and working out

differences of opinion.

K E Y P O I N T



There are five calibration meetings that occur and are required – one for each of the leadership teams (as defined earlier in Figure 9; see section, “Succession Planning Governance and Target Populations”).

The calibration meetings allow leaders to discuss individual associates to ensure consistency and agreement on the overall assessment and plans for high-potential talent. Sometimes there are disagreements due to differing perspectives, but the meetings provide a mechanism for getting a balanced view of each person and working out differences of opinion. Occasionally, a competency or promotability rating will change as a result of these discussions.

Because managers who are peers are invited to these sessions, the meetings help promote cross-functional development / moves, addressing one of the organization’s key areas of focus – growing general management skills. The meetings also help raise the visibility of high-potential candidates and enable the senior leadership team to prepare for the presentation to the board of directors (see section, “Board of Director Talent Review”).

Each leadership team has a one day (four to five hours) calibration session, and then four shorter quarterly meetings for touch up, followup on action items, et al. According to the vice president of human resources, the calibration meetings are now “… halfway on a continuum between an annual event and a process that occurs throughout the year.”

During the sessions, leaders do not review the entire succession planning population (about 300 employees) but, instead, focus on three categories of associates:

• Bench strength behind current officers;

• Ready-to-move candidates; and,

• Lower-level high potentials who could be future officers of the company.

The manager of organizational development and training facilitates the meetings by preparing the agenda and materials / tools. The agenda is kept flexible, so that the CEO, senior vice president of HR or other

�4 For more information, Succession Planning in Leadership Development How to

Build a Leadership Pipeline – The Textron Story, Bersin & Associates / Kim Lamoureux,

September 2006. Available to research members at www.bersin.com.library.

Using a facilitator

to guide talent

discussions helps

attendees to remain

focused on key

objectives and capture

strategic action

items.��

A N A LY S I S

United Stationers has

instituted a process

by way of quarterly

meetings for following

up on key action items

that result from talent

discussions.

BEST PRACTICE

htto://www.bersin.com.library



Figure 20: Assessment Summary for Calibration Meeting

senior leader can add a new topic on the fly – but it mainly focuses on tactical succession planning questions, such as the following.

• Where are the open positions?

• Who can we promote?

• How can we get people exposed to multiple functions across the company?

Talent assessment and leadership competency data are rolled up into a single consolidated report (see Figure 20) that leaders can view on a computer screen during the meeting.

Talent calibration meetings below the senior leadership team level are not required, but are highly encouraged by HR managers and senior leaders. As with the executive meetings, the discussion of individual associates helps ensure consistency in approach to talent management and succession planning.

Figure 20: Assessment Summary for Calibration Meeting


Using consistent tools

and language builds

a strong culture and

platform for business

leaders to share talent

information.

A N A LY S I S

The purpose of

succession planning

at United Stationers

is to increase bench

strength and support

profitable growth.

K E Y P O I N T



Board of Director Talent Review

On a more formal level, an annual executive-level succession plan is created for the senior leadership team and their direct reports, which includes vice presidents and all Section 16 Officers. This output is presented to the board of directors in the form of a tabulated book that includes four key charts and summaries, as follows.

1. Introduction and Overview – A description of the various color-coded ratings for promotability and competency assessments (see section, “Appendix I: Introduction and Overview”).

2. Executive Assessment Summary – The organization charts depict the roles in the senior tier of the organization and a promotability assessment for each incumbent. The promotability of each executive is depicted via color-coded bars above each executive’s picture (see section, “Appendix II: Executive Assessment Summary”).

3. Individual Executive Assessment Summary – A summary of an individual’s promotability and competency assessments, as well as strengths, development needs, key accomplishments and background experience (see section, “Appendix III: Executive I Assessment Summary”).

4. Executive Succession Plans – An expansion of the executive assessment summary chart with a list of specific candidate successors for each executive role and his / her timing for readiness to fill the position (see section, “Appendix IV: Executive Succession Plans”).

This information is received by board members prior to a regularly scheduled board meeting. The board members review the data and come prepared to:

• Discuss any areas of concern (e.g., organizational gaps, potential assessments); and,

• Provide direction for the areas on which to focus in the coming year (i.e., development, growth areas ).

�5 For more information, Executive Development: A Critical Component of

a High-Impact Leadership Development Strategy, Bersin & Associates / Kim

Lamoureux, April, 2008.

What used to be the

development and

oversight of succession

plans by the board

has evolved into a role

that contributes to

the development of

executives – to

ensure long-term

sustainability and

limited disruption

when positions are

transitioned.��

K E Y P O I N T



Development Planning

In the area of learning, the succession planning process helps to identify individual development needs. In addition, it also creates opportunities to address organizational development issues (such as how to build silos of competency), while also creating a spirit of cross-functional cooperation that integrates the various businesses.

Organizational / Team Development

United Stationers uses the succession planning process to address gaps in organizational / team competencies. Because organizational development is a much broader subject than individual development (and it can be difficult to switch midstream from discussing one to the other), organizational issues are discussed in meetings separate from the calibration sessions.

Examples of organizational gaps that companies may encounter include:

• Improving speed to market;

• Increasing bench strength;

• Eliminating barriers for cross-functional movement;

• Increasing diversity and inclusiveness in leadership positions; and,

• Enhancing innovation and creativity.

Individual Development

Individual development is focused on both leveraging strengths and addressing areas of weakness. All of the talent management, performance management and succession planning components feed into the individual development plans (see Figure 21) to guide development for both current and potential future roles. United Stationers is currently in the introductory phase of formal development planning, with some pockets of the organization participating fully.

Succession planning

without development

is just a list of names.

K E Y P O I N T

Performance

management, career

development and

succession planning

must all provide input

to an individual’s

development plan.

BEST PRACTICE



Figure 21: View of Associate’s Individual Development Plan

Applying Succession Planning At Non-Executive Levels

As mentioned earlier, there are several noteworthy differences in how succession planning is applied to Section 16 Officers versus all other levels of the organization. Calibration is one of the key differences. For example, HR always supports the leadership team meetings with agendas and resources – but cannot offer the same level of calibration support elsewhere in the organization.

In addition to the succession planning process at corporate headquarters, similar tools are being used in an informal, ad-hoc basis at the distribution facility level to groom future general operations managers. Corporate HR managers help develop the succession

Figure 21: View of Associate’s Individual Development Plan


OtherFunctional Competency Assessments

DELTA 360° Values AssessmentEtc.

IndividualDevelopmentPlanning (LDP)

View of Associate

Performance ManagementGoals / Objectives Assessment

Values AssessmentSkills Assessment

Developmentfor Current

Role

Developmentfor PotentialFuture Roles

OtherDevelopmentSuggestions

Succession PlanningLeadership Competency

AssessmentPromotability Assessment

United Stationers

focuses on key

positions at various

levels of management,

not only executive-

level roles.

BEST PRACTICE



planning competency within local HR groups, and then also assist with the necessary tools, processes and coaching.

At the same time, every organization across the company has access to the integrated talent management system. The IT and finance departments, for example, have completed online career profiles for all exempt-level employees in anticipation of a more robust succession planning process for these lower-level employees – and for use in function-specific development efforts.

Succession planning and competency development for associates below the role of general operations manager in the field are currently managed by local HR resources. The corporate talent management group acts as a consultative body.

Field organizations have requested that corporate HR managers create a more robust succession planning process for the distribution infrastructure. The goal is to identify today’s line supervisor who has the potential to become a general operations manager someday. According to the manager, organization development and training,

“It’s all a matter of resources – we try to partner wherever we can.”

Talent Management Integration

Succession planning integrates with other elements of talent management at United Stationers to create a high-performance organization (see Figure 22). (For a description of how competencies are used in succession planning, see section, “Talent Management at United Stationers.”) Descriptions of performance management and development are in the following sections.

Particularly in

companies with

supporting technology,

it is common for

corporate HR not to

be involved in talent

reviews that target

lower-level managers

or other individual

contributors.

K E Y P O I N T



Figure 22: High Performance Organization

Performance Management

Performance management is about establishing goals, objectives and development plans – and assessing employees against these plans. Many organizations, including United Stationers, use the performance management process as one of the key influences for identifying high-potential individuals.

Therefore, there is a general expectation that succession planning aligns with performance management – those who perform best will go the farthest. Yet, these are two distinct processes with two distinct purposes – performance management reflects the past, while succession planning projects into the future (see Figure 15; see section on “Talent Assessment”).

Pay for Performance

A strong link exists between compensation and performance at United Stationers, which believes in boosting retention and motivation by differentiating rewards for top performers. The idea is to align performance ratings with compensation and bonuses to incentivize those who exceed expectations or are role models.

Figure 22: High Performance Organization


PerformanceManagement

SuccessionPlanning

DevelopmentPlanning

HighPerformanceIndividuals

HighPerformance

Teams

HighPerformanceOrganization

FunctionalCompetencyAssessments

BusinessResults

BusinessResults

Compensation

practices at United

Stationers are used

to differentiate high

potentials and top

performers.

BEST PRACTICE



Compensation practices are also used to differentiate high potentials and top performers. This approach is eased by the fact that the compensation and succession planning processes are both under the domain of a single vice president of HR, who is able to pull two “levers” to ensure the company is retaining the right people.

Development

United Stationers has developed a high-potential development pilot program. The goal of the program is to fill gaps in succession plans by identifying approximately 20 future functional leaders and general managers – and giving them cross-functional coaching and mentoring from the senior leadership team and leadership team members. The program has three main elements:

• Assessment;

• Development; and,

• Mentoring.

United Stationers defines a “high potential” as an associate in the target population who is capable of moving two levels of responsibility in five years. An example would be a director with the potential to become a senior vice president.

Very high leadership competency scores help identify high potentials. In the calibration process, high potentials are discussed (along with the larger group) and evaluated on three basic criteria:

• Desire to become a leader;

• Capability to become a leader; and,

• Opportunity to become a leader.

The company has moved to become more open and transparent in how information is shared with high potentials once they are identified. This does not, however, mean sharing competency assessments or succession plans with individuals. HR simply facilitates a meeting with the high potential to let him / her know that he / she is highly regarded by peers

United Stationers

defines a “high

potential” as an

associate in the target

population who is

capable of moving two

levels of responsibility

in five years.

K E Y P O I N T



Figure 23: Senior Leader Individual Learning Plan

and management. The high potential is then asked to participate in the development process, which has three main elements:

• Enrollment in a program of job-related personality assessment�� (the Sixteen Personality Factor Questionnaire (16PF) from IPAT, Inc.��, fifth edition);

• Assignment to an officer-level, cross-functional mentor; and,

• Creation of an individual development plan (see Figure 23) guided by a senior leadership team sponsor and the associate’s manager.

�6 For more information, Organizational Restructuring in Retail Requires Rapid

Talent Development: Ace Hardware Administers Talent Assessments to Reorganize

Field Operations and Target Prescriptive Development, Bersin & Associates / Kim

Lamoureux, January 2008. Available to research members at www.bersin.com/library.�7 “�6PF” is a registered trademark and “Sixteen Personality Factor” is a

trademark of the Institute for Personality and Ability Testing, Inc. Source:

http://www.ipat.com.

Figure 23: Senior Leader Individual Learning Plan


The Individual Development Plan should addressboth individual and organizational needs

Desired Competencies(Knowledge,Behavior,

Skills)

Open Positionsand Opportunities

IndividualNeeds / Desires

IndividualDevelopment

Plan (LDP)

Values

StrategicInitiatives

DesiredBusiness

Outcomes

Mission

Vision

OrganizationNeeds

DevelopmentNeeds

Strengths

AnnualGoals

Mobility

CareerAspirations

Interests

http://www.bersin.com/library

http://www.ipat.com



Business Impact / Metrics

Strengthening strategic succession planning has yielded multiple benefits to United Stationers. Soft benefits that are difficult to measure (but are believed to have been achieved) include:

• Gives senior leadership more visibility into all the talent in the organization;

• Provides managers with visibility to people from other functions who have potential to join their organizations;

• Enables managers to see who might want to move laterally across the company;

• Boosts retention;

• Reduces recruitment and hiring costs; and,

• Preserves institutional knowledge.

Other harder benefits can also be measured. For example, at United Stationers the percentage of leadership positions with named successor candidates is measured across three timeframes:

• Immediate;

• One to three years; and,

• Long term.

The company also looks at internal versus external hires across the target population to ensure that development is having the desired effect – and that the succession plans are being realized.

The HR department also measures “performance turnover” in key jobs. This is achieved by weighting top performers who exit the company more heavily than poor performers who leave.

An often unseen

benefit of succession

management is

the preservation

of institutional

knowledge.

K E Y P O I N T



Looking Ahead

Earlier in this report, we shared the Bersin & Associates Succession Management Maturity Model® (see Figure 2). United Stationers has steadily climbed this Model over the past three years and is currently at Level 3 – referred to as “Succession Planning.” The company continues to enhance its existing practices with the goal of achieving the highest Level of Maturity (“Succession Management”) within the next couple of years.

The HR leaders at United Stationers believe in continuous process evolution and improvement. They recognize that even more sophisticated practices need to be put in place. Additional plans that the HR organization intends to continue in 2008 to 2009 include:

• Implementing a new hire rotational program to address and grow organizational capabilities – and to expose early-career associates to multiple functions earlier;

• Expanding the high-potential pilot program to a broader population of managers;

• Increasing the linkage with total compensation and leveraging Cornerstone OnDemand data for decision-making; and,

• Updating the leadership competency model to reflect new strategies and priorities.

Looking further into the future, the company’s plans include:

• Driving organizational and team development;

• Broadening the use of development planning;

• Driving succession planning to lower levels of management where appropriate;

• Integrating succession planning with recruiting tools, enabling recruiters to identify potential internal candidates for promotion proactively;

• Introducing career pathing;

• Building a coaching culture; and,

• Introducing workforce planning.

Succession planning

is a journey, not only

in terms of process

improvement, but in

terms of a company’s

ability to continuously

align succession with

the business strategy

and changing

business needs.

A N A LY S I S



Lessons Learned and Best Practices

Human resources managers at United Stationers learned several important lessons that can be used by other talent management organizations seeking to grow senior management bench strength with strategic succession planning.

Make Succession Planning a Priority for the Board of Directors

Delivering an annual succession plan to the board of directors provided a “rationale” for developing the process for the first few years. This gave succession planning its own momentum. It also increased the desire of HR managers to produce a great product to impress the board.

Get Buy-in from Senior Management along the Way

As succession planning became more of an ongoing process and less of an annual event, some leaders started to question its value since it took time from other business needs. HR managers had to shift their attention from the board of directors to making succession planning meaningful for business leaders.

HR managers keep executives focused on the importance of succession planning by identifying business gains that are the outcome of the process. This might be an internal promotion that saved the company from a long and expensive recruiting search, or a cross-functional promotion that helps groom a candidate for a general management position. The accumulation of those successes gives executives a compelling reason to make succession planning a priority.

Flexibility is another key to driving recognition of the value of succession planning. This means acknowledging and meeting the different talent requirements of the three separate, yet integrated, businesses that coexist within United Stationers.

United Stationers’s

HR group keeps

executives focused

on the importance of

succession planning by

identifying business

gains that are the

outcome of the

process.

BEST PRACTICE



Best Practices

Key best practices achieved by United Stationers include:

• Understanding the business strategy and the kind of talent that is needed to drive this strategy;

• Creating a leadership competency model that is used for all leaders and associates included in the succession planning process;

• Engaging senior executives, as well as the board of directors, in identifying, assessing and developing high performers (based on their potential next roles);

• Establishing a formal schedule for talent calibration discussions with five of their most critical businesses and functions;

• Delivering an annual talent review of the company’s senior leaders to the board of directors;

• Adopting a technology platform that supports the integration of talent information, which can then be used in decisions regarding the development and movement of talent;

• Involving associates in the process, enabling them to create and update their individual profiles; and,

• Integrating succession planning with performance management, compensation and development.

Conclusion

Through our ongoing discussions with many organizations, we know that most companies are only just beginning to define and implement processes for ensuring the identification and readiness of high potentials to take on senior and key positions. United Stationers is ahead of this curve, but the company also recognizes that this is a journey with many steps.

Creating formality and

providing structure to

succession planning

makes it more clear

and digestible to

managers.

K E Y P O I N T



Like most organizations, it has taken United Stationers several years to get its succession planning program to where it is today. That may be the real message here. Based on interviews with HR managers at multiple companies, unlike other talent management functions, it takes about three years (or three full cycles) to create momentum – and an estimated five-plus years for succession management to become engrained in the culture and be a natural part of a manager’s role.

Consistency and “stick-to-itiveness” are two organizational competencies that are critical for success in succession management. With this in mind, United Stationers is able to mark the strides the company is making in order to reach world-class, Level 4 Maturity with its succession management program.



Appendix I: Introduction and Overview

United Stationers 12 5/5/2008 HIGHLY CONFIDENTIAL

Tab 3

Introduction and Overview This section provides an organization chart depicting the roles in the senior tier of the organization and a promotability assessment for each incumbent. The promotability of each executive is depicted via color-coded bars above each executive’s picture:

Highly Promotable – Potential for horizontal growth opportunity or vertical promotion. Individual can move into another role in the organization, expand existing scope of responsibilities, or move to a higher level of responsibility within the organization.

Promotable in 1-3 Years – Near term future potential for horizontal growth opportunity or vertical promotion. Individual can move into another role in the organization, expand existing scope of responsibilities, or move to a higher level of responsibility within the organization in a 1-3 year time period.

Well Placed Currently – Performing at acceptable level in current role. Individual may have potential to move into another role in the organization. Limited potential to expand scope of responsibilities or move to a higher level of responsibility within the organization at present time.

Developmental Needs – Requires significant development in current role to meet expectations.

Currently Placed Above Capacity; Action Required – Performing below acceptable level in current role and requiring immediate action.

Each executive’s individual assessment summary page includes a color-coded pie chart, depicting the executive’s competency level for each of the twelve leadership competencies, grouped into the four competency clusters of Strategic Thinking, Leading Associates, Results Orientation, and Interpersonal Effectiveness. The scale is from 1 – 5*:

5 Significant Strength / Strategic – Skillfully leverages this competency to achieve strategic and enterprise-wide outcomes.

4 Effective / Operational – Effectively utilizes this competency to achieve key business outcomes.

3 Consistent / Tactical – Applies this competency consistently, focused largely on processes or activity-based outcomes.

2 Developmental Opportunity – Demonstrates awareness and understanding of this competency without consistent application to outcomes.

1 Significant Developmental Opportunity – Does not demonstrate minimum level of proficiency.

The assessment summary page also includes Strengths, Developmental Needs, Key Accomplishments, and Background & Experience for the executive. At the end of each assessment section, you’ll find a tab which houses succession plans and an assessment summary for each potential immediate and short-term successor.




Appendix II: Executive Assessment Summary

United Stationers Page 13 5/6/2008 HIGHLY CONFIDENTIAL




Appendix III: Executive 1 Assessment Summary





Appendix IV: Executive Succession Plans





Appendix V: Table of Figures

Figure 1: High-Impact Talent Management Framework® 5

Figure 2: Bersin & Associates Succession Management Maturity Model® 6

Figure 3: United Stationers at a Glance 9

Figure 4: Major Business Lines 10

Figure 5: United Stationers’s Talent Management Organization 13

Figure 6: Leadership Competency Model 17

Figure 7: Example of Proficiency Levels 18

Figure 8: Succession Planning Process Evolution 21

Figure 9: Succession Planning Governance and Target Populations 25

Figure 10: Career Profile – Key Accomplishments 28

Figure 11: Individual Profile 29

Figure 12: Competency Assessment Form 30

Figure 13: Competency Assessment Summary 30

Figure 14: Overall Competency Rating 31

Figure 15: Performance Versus Potential 32

Figure 16: Talent Assessment – Promotability Rating 33

Figure 17: Talent Assessment – Retention Risk 33

Figure 18: Exempt Employee Succession Plans 35

Figure 19: Calibration Meeting Participants 36

Figure 20: Assessment Summary for Calibration Meeting 38

Figure 21: View of Associate’s Individual Development Plan 41

Figure 22: High Performance Organization 43

Figure 23: Senior Leader Individual Learning Plan 45



About UsBersin & Associates is the only research and advisory consulting firm focused solely on WhatWorks® research in enterprise learning and talent management. With more than 25 years of experience in enterprise learning, technology and HR business processes, Bersin & Associates provides actionable, research-based services to help learning and HR managers and executives improve operational effectiveness and business impact.

Bersin & Associates research members gain access to a comprehensive library of best practices, case studies, benchmarks and in-depth market analyses designed to help executives and practitioners make fast, effective decisions. Member benefits include: in-depth advisory services, access to proprietary webcasts and industry user groups, strategic workshops, and strategic consulting to improve operational effectiveness and business alignment. More than 3,500 organizations in a wide range of industries benefit from Bersin & Associates research and services.

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About This ResearchCopyright© 2008 Bersin & Associates. All rights reserved. WhatWorks® and related names such as Rapid e-Learning: WhatWorks® and The High-Impact Learning Organization® are registered trademarks of Bersin & Associates. No materials from this study can be duplicated, copied, republished, or re-used without written permission from Bersin & Associates. The information and forecasts contained in this report reflect the research and studied opinions of Bersin & Associates analysts.

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CASE STUDY · United Stationers Inc. is North America’s largest broad-line wholesale distributor of business products, with 2007 consolidated net sales of $4.6 billion. The company