SouthernCompany Case Study

241

C H A P T E R

13 SOUTHERN COMPANY

JIM GREENE

A robust leadership development and succession planning process that uses leader- ship performance standards and competencies to identify successors and high - potential individuals, and target development.

Introduction

Background

Initial Improvements

The Leadership Action Council

Competency Model

Leadership Assessment

Succession Planning

Identifi cation of Potential Successors and High - Potential Individuals

Assessment of the Talent

Review of Individuals

Leadership Database

Development Activities

Senior Leader Development Program

Emerging Leader Program

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C o p y r i g h t 2 0 1 0 . P f e i f f e r .

A l l r i g h t s r e s e r v e d . M a y n o t b e r e p r o d u c e d i n a n y f o r m w i t h o u t p e r m i s s i o n f r o m t h e p u b l i s h e r , e x c e p t f a i r u s e s p e r m i t t e d u n d e r U . S . o r a p p l i c a b l e c o p y r i g h t l a w .

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242 Best Practices in Talent Management

Evaluation and Lessons Learned

Evaluation

Lessons Learned

INTRODUCTION

Having a steady supply of leaders with the right skills in the right jobs is critical to the

success of an organization. Facing the possibility that a number of long - tenured lead-

ers across all levels would soon retire, Southern Company enhanced its succession

planning and leadership development processes to ensure a full leadership pipeline to

sustain business success. This chapter details these processes.

BACKGROUND

Southern Company is an electric utility serving 4.4 million customers in the southeast-

ern United States. A leading U.S. producer of electricity, Southern Company owns electric

utilities in four states and a growing competitive generation company, as well as fi ber

optics and wireless communications. Southern Company brands are known for excel-

lent customer service, high reliability, and retail electric prices that are signifi cantly

below the national average. Southern Company has been listed as the top ranking U.S.

electric service provider in customer satisfaction for nine consecutive years by the

American Customer Satisfaction Index (ACSI). Southern Company employs approxi-

mately 26,000 people.

In 2003, America ’ s aging workforce began to receive a lot of attention and was

viewed as a potential business challenge for Southern Company. A “ grow your own ”

company, Southern Company historically hired at the entry level and relied on internal

promotions rather than external hiring to fi ll leadership positions. In the late 1970s and

1980s, the company hired a large number of people. A low turnover rate resulted in the

leadership group being very stable and growing progressively older. In 2003, the aver-

age age of executives was fi fty - two. The average ages of middle managers and fi rst -

line managers were forty - nine and forty - seven, respectively. This age bubble posed a

potential succession risk. Southern Company has developed a cadre of leaders who

possessed deep business knowledge and fi t the organization and culture. Projections

showed that, as executives began to retire in greater numbers, their successors would

leave soon after. The need to develop a new generation of leaders became the driver

for re - looking at the succession and leadership development efforts to ensure a sus-

tainable supply of quality leaders to meet business needs.

In early 2004, Southern Company ’ s CEO initiated an in - depth review of succes-

sion planning and leadership development. The goal of the study was to review current

practices and determine the steps necessary to advance leadership development to the

next level and ensure an adequate supply of leadership talent over the next ten years.

The study began by interviewing a cross - section of executives and managers to gain

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Southern Company 243

an internal perspective of the strengths and gaps of the succession planning and lead-

ership development systems. An external consultant was engaged to provide an objec-

tive third - party view and to provide best practice research.

The review noted several strengths. Senior leaders were engaged and devoted a

signifi cant amount of time to leadership development. During the interviews they

talked about conducting mentoring groups and spending time getting to know key

high - potential individuals in their company or business unit. Southern Company also

had basic processes in place to identify and develop leaders. Succession planning was

conducted annually, with its primary focus being on replacement planning. Assign-

ments and development moves were used to provide individuals a wide range of expe-

rience. A number of decentralized leadership development activities were in place.

These programs utilized a variety of activities, including mentoring, group mentoring,

business acumen discussions, and education classes. A corporate action learning pro-

gram for high - potential fi rst - line leaders was conducted annually.

Several gaps were identifi ed. During the interviews, leaders talked about knowing

the high - potential talent in their organization very well. However, they did not know

talent across Southern Company. Cross - system calibration of talent was diffi cult for

several reasons. A standard set of information was not available for comparing indi-

viduals. Southern Company lacked a comprehensive model that identifi ed the key

leadership practices necessary to achieve business success. Across Southern Company

there were a number of different defi nitions of leadership, and emphasis was placed on

developing different skills and abilities. A person viewed as high - potential at one loca-

tion may not have been viewed in a similar light at other locations. Managers also

tended to promote individuals they knew and had working relationships with. The

study also revealed that the assessment process lacked suffi cient rigor to support criti-

cal talent decisions. Southern Company has had the luxury of multiple people viewing

a person ’ s performance over a long period of time in different jobs and situations. This

provided a good indication of people ’ s capabilities. However, because people were

viewing leaders through different lenses, there were different opinions of people ’ s

capabilities and potential to assume expanded roles. More objective measures to help

predict potential were needed.

The succession planning process placed too much emphasis on replacement plan-

ning and not enough on developing critical talent pools. There was insuffi cient focus

on high - potential talent fi ve to ten years from the executive level. Leaders reported

having diffi culty targeting development to the most critical areas. A fi nal gap noted

information on succession plans and high - potential individuals was kept in a series of

separate fi les located across Southern Company, making consolidated information dif-

fi cult to obtain and use.

INITIAL IMPROVEMENTS

Following the review, Southern Company took steps to improve leadership develop-

ment. The initial effort focused on building a common leadership framework

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244 Best Practices in Talent Management

across Southern Company, including a common defi nition and understanding of lead-

ership. Southern Company adopted the leadership framework articulated by Ram

Charan, Stephen Drotter, and James Noel in their book The Leadership Pipeline: How to Build the Leadership - Powered Company . Central to this framework is understand- ing that leadership begins with the work leaders perform. Managers go through key tran-

sitions in their careers when they move up the organizational ladder. The scope and

complexity of work increases at each level, requiring new skills, time applications,

and work values. Southern Company began building its leadership framework by

identifying the major leadership transitions within the company and their associated

requirements. Stephen Drotter was employed to help customize the framework for

Southern Company. Selected executives and managers were interviewed, asking them

to identify the major results they needed to produce in their jobs to be successful. This

information was analyzed and resulted in six levels of leadership being identifi ed

within Southern Company:

Individual contributor — leads self.

First - line manager — leads a team of individual contributors. May have fi rst - line supervisors reporting to him or her.

Manager of managers — Leads a large department or organizational entity. Has fi rst - line managers as direct reports.

Functional manager — Leads a single function or organizational entity. Usually an offi cer.

Multi - functional manager — Leads multiple functional areas.

CEO/business unit manager/enterprise functional manager — Leads a company, major business unit, or a major function at the enterprise level.

For each level, the associated requirements (performance standards) were identi-

fi ed. Performance standards list the complete set of results expected of leaders at that

level. For each level of leadership, the identifi ed results were grouped under the fol-

lowing performance dimensions:

Business (Operational, Technical, Financial)

Management

Leadership

Relationships

Community/External Involvement

Customer

A sample set of performance standards for manager of managers is shown in

Figure 13.1 .

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Southern Company 245

FIGURE 13.1. Manager of Manager Performance Standards

Business Results (Operational, Technical, Functional)

Management

Leadership

Relationships

Community/External Involvement

Customer

NOTE: Business results are the specific goals stated in the Business Results section of the performance plan. Please use the performance plan form to document business results and progress against them.

Achieve results by directing the work of other managers & the organization Produce annual operating/business plans which are connected to functional strategy Create measurement systems for evaluating & monitoring major goals Build an organizational structure that supports mission/goals & promotes efficient work processes Optimize resource allocation & trade-offs among teams Optimize work processes Build a strong leadership team with noticeable teamwork that produces results Ensure that self & direct reports conduct performance management & act on poor performers Make tough, timely decisions Effectively handle crisis situations Measure direct reports on introducing innovative processes/programs; that the value added outweighs the cost

Collaborate & integrate across organizational boundaries

Establish & communicate vision & direction such that everyone in organization can articulate direction & goals

Communicate essential information to organization in a timely manner; use managers as communication channel when appropriate Role model Southern Style; hold team accountable for living Southern Style; ensure managers do the same Ensure that direct reports collaborate & help with trade-off decisions Select, develop, & retain effective leaders & a successor Mentor first level management

Leverage appropriately diverse team; create an inclusive work climate where people trust & value one another Drive change initiatives

Build effective working relationships with manager, direct reports, & the next level(s) down Build effective networks to get things done (peers, cross functional, business partners, contractors) Build coalitions to accomplish results

Be an active member of at least one appropriate community & external group Respond appropriately to community requests for assistance Use every opportunity to be an effective & knowledgeable spokesperson for Southern Company

Focus organization on delivering exceptional customer service (internally & externally) Use the results of customer surveys & feedback (internal and/or external) to improve customer service Look for opportunities to promote the sale of available Southern Company products

The identifi cation of specifi c performance standards helped leaders understand the

expectations for a particular level. They also helped build a common defi nition of

leadership across Southern Company. Performance standards enabled more objective

discussions of people and facilitated better development plans. Managers reported that

their discussions of people became more objective because they were focused on a

common set of expectations.

Performance standards were woven into succession and leadership development

processes in several ways. A small group of human resource professionals were trained

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246 Best Practices in Talent Management

to conduct behavioral interviews to determine an individual ’ s performance relative to

the performance standards. The results of these assessments were used in talent review

sessions. Managers were trained to use the performance standards in their develop-

ment discussions with leaders reporting to them. The performance standards were also

used during succession planning to help identify high - potential individuals.

The use of performance standards in the succession planning process took hold in

pockets of the organization. Overall, the implementation of performance standards

was viewed as a human resource initiative rather than coming from line management.

Some organizations used the standards in succession planning, while others used them

as part of their development planning for leaders. They were not consistently applied

in all parts of the organization. The accuracy of the behavioral interviews conducted

by HR professionals was questioned by management. To fi x these issues, Southern

Company took several steps.

THE LEADERSHIP ACTION COUNCIL

In 2005, Southern Company ’ s CEO chartered a group of executives to serve as the

steering committee for leadership development. This council was given the responsi-

bility to develop guidelines and facilitate integration of leadership development pro-

grams and processes across Southern Company. The council is made up of senior line

executives representing each operating company and business unit and the senior VP

of HR. The formation of this council moved leadership development from being a

human resource initiative to being line - driven. Human resources served in a partner-

ship role with the council. Southern Company is a highly matrixed organization. Hav-

ing a council that represented all of the parties was essential to gaining traction.

Building on the work done previously, the Leadership Action Council established

project teams to research issues and make recommendations. These teams reviewed the

areas of succession planning, leadership assessment, leadership development, and lead-

ership education. Each project team was led by Leadership Action Council members,

had line management participation, and utilized HR support. These teams reviewed

best practices, gathered management input, determined gaps, and made recommenda-

tions. The Leadership Action Council made the following recommendations in 2006.

Create a competency model aligned closely to the performance standards to assess

leadership candidate strengths and weaknesses;

Implement an external, objective assessment process for executives and high -

potential individuals;

Expand the succession process to focus on creating targeted development plans

for successors to executive positions;

Design and implement a leadership database to capture and track talent informa-

tion and provide key analytics to assess talent gaps;

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Southern Company 247

Create a multi - event educational experience for high - potential managers of man-

agers who are ready to move into functional manager (offi cer) roles; and

Align operating company/business unit leadership development programs to have

a common focus.

The creation of the Leadership Action Council helped Southern Company make

major progress in advancing leadership development to the next level. The ongoing

involvement of senior executives was critical in revising, gaining approval of, and

implementing succession planning and leadership development programs and proc-

esses. Described below are the initiatives that Southern Company adopted as an out-

growth of the Leadership Action Council recommendations.

COMPETENCY MODEL

The Leadership Action Council noted that leaders were having diffi culty identifying

the right development actions. There was also a misalignment between feedback indi-

viduals were receiving from an external assessment process and the feedback they

were receiving internally. To rectify these problems, a core set of leadership compe-

tencies was developed.

Performance standards describe the set of results individual contributors and lead-

ers are expected to produce. These standards were used as the basis for identifying

critical leadership competencies. Working with an external organizational consulting

fi rm, Blankenship & Seay Consulting Group, leadership competencies were selected

that best aligned with and supported the performance standards. The Leadership Action

Council validated these competencies to ensure they were critical to achieving busi-

ness success. The competency work resulted in the adoption of the nine leadership

competencies shown below.

Southern Company Leadership Competencies

Adapting and responding to change

Critical thinking

Deciding and initiating action

Entrepreneurial and commercial thinking

Formulating strategies and concepts

Leading and supervising

Persuading and infl uencing

Planning and organizing

Relating and networking

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248 Best Practices in Talent Management

Two competencies typically found in leadership competency models, ethical

behavior and driving results, were not included because they are emphasized in South-

ern Company ’ s values statement, Southern Style.

The performance standards and associated leadership competencies now serve as

the foundation for all succession planning and leadership development work.

LEADERSHIP ASSESSMENT

A gap in the leadership development model described earlier was lack of a rigorous

assessment process. Subjective views of people were used to make developmental and

succession decisions. Southern Company supplemented internal views with data from

assessments done by an external industrial psychology fi rm. In partnership with this

fi rm, changes were made to increase rigor and alignment. The new process, used for

executives and high - potential leaders, measures an individual against the nine core

leadership competencies listed above. The process takes half a day and consists of a

battery of psychological - related tests, a simulation exercise, and a structured inter-

view. Participants receive ratings on the nine leadership competencies and a report

containing their results and development suggestions. Figure 13.2 shows sample

results from the competency assessment. Participants also receive direct feedback

from the psychologist. This new process increases the rigor and consistency of execu-

tive assessments and provides objective data as input into the succession planning, tal-

ent review, and development planning processes.

Southern Company has also revised the 360 - degree assessment and upward

assessment processes to align with the nine core leadership competencies.

FIGURE 13.2. Sample Leadership Competency Assessment Results

NAME: John Sample LEADERSHIP LEVEL: Manager of Manager

Competencies Adapting & Responding to Change

The blue shaded areas represent the expected range for a manager of manager at Southern Company. The range was empirically determined by assessing a cross- section of individuals at this level of leadership, and differs for each level of leadership. The black dots are the individual’s score for the particular competency.

Low 1 2 3 4 5 6 7 8 9 10

Low-Mid Mid-Range High-Mid High

Critical Thinking Deciding & Initiating Action Entrepreneurial & Commercial Formulating Strategies Leading & Supervising Persuading & Influencing Planning & Organizing Relating & Networking

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Southern Company 249

Leaders receive feedback from subordinates, peers, and their managers on each of the

nine competencies and Southern Style (values statement).

SUCCESSION PLANNING

Another recommendation made by the Leadership Action council was to expand the

succession planning process to focus on identifying and planning the development of

people who can take on expanded leadership roles in the future. Succession planning

is done annually and consists of three major steps shown in Figure 13.3 .

Identifi cation of Potential Successors and High - Potential Individuals In this step management identifi es candidates who are ready now to fi ll a critical lead-

ership position should it become vacant and candidates who, with additional develop-

ment, could fi ll the position. Plans for all executive and director - level positions are

developed. Potential successors are classifi ed as:

Ready Now : An individual who could be placed in the position today, without hes- itation. There should be a close match between the requirements of the job and the

individual ’ s skills, knowledge, and experience

1 – 2 : An individual who needs additional development in a current position or one additional move to become ready

Long Term : An individual in the pipeline for the targeted position and needs two to three additional moves to become ready

Management judgment, along with the assessment information described earlier,

is used to identify potential successors. The identifi cation process is generally bottom -

up. A leader in a key role suggests potential successors for his or her position. This list

is validated or modifi ed as it is discussed by senior management.

A new tool, called a success profi le, was developed to help managers identify the

right successors. The success profi le specifi es the key competencies and experiences

required to perform a specifi c leadership role. Success profi les are created by either

interviewing the job incumbents and the direct manager or by sending them an Internet -

based survey. The results from the interview or survey are combined and validated by

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FIGURE 13.3. Succession Planning Process

Identify potential successors and high- potential individuals

Assess individuals

Get to know, review, and plan development

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250 Best Practices in Talent Management

executive management. Requirements are based on future business needs, not just

today ’ s world. Specifi cally, a success profi le identifi es:

The leadership competencies most critical for the position;

Additional business/technical knowledge, skills, and abilities needed for the

job; and

Key experiences that best prepare someone for the position.

See Figure 13.4 for a sample success profi le. Success profi les provide specifi c cri-

teria for managers to use in selecting successors and identifying readiness. Several

examples have been noted whereby the list of successors for a particular job changed

as a result of using the success profi le. To date, success profi les have been completed

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FIGURE 13.4. Sample Success Profi le

POSITION: Manager, Distribution MANAGERIAL LEVEL: Manager of Managers

Key Competencies Deciding and Initiating Action

Critical Knowledge, Skills, and Abilities • A knowledge of distribution operations, including field work, applications, and restoration activities

Experiences • Committee involvement at the SoCo level would be beneficial since this position represents Distribution at the SoCo level • Storm restoration experience • Experience in building consensus among different entities/groups • Good understanding of how each electric utility department works and their dependencies on each other. This also includes the dependencies of Operating Company to Operating Company

• Solid understanding of budget activities/processes • General understanding of and familiarity with metering, fleet operations, and distribution planning • Knowledge of disaster preparation and restoration activities (internal and external) • A technical knowledge of Distribution Systems and Equipment • Basic knowledge of Distribution coordination practices • Basic knowledge of computer systems and programs that are used in Distribution • Basic knowledge of accounting practices used in Utilities • Basic knowledge of Distribution Indices like SAIDI, SAIFI, Customer Value • Broad business knowledge

Low 1 2 3 4 5 6 7 8 9 10

Low-Mid Mid-Range High-Mid High

Leading and Supervising Planning and Organizing Relating and Networking

Other Competencies Adapting and Responding to Change Critical Thinking

Persuading and Influencing

Entrepreneurial and Commercial Formulating Strategies

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Southern Company 251

for some executive positions, and plans are to complete them for all executive and

director - level jobs.

In addition to successors, management identifi es high - potential individuals during

the succession process. This is also done using a bottom - up approach. Managers iden-

tify individuals within their organization whom they judge to have the potential to take

on expanded roles. This list is validated or modifi ed as it is reviewed by managers up

the chain.

“ Potential ” addresses the aptitude to perform work at the next leadership level.

Managers rate the promotability of all leaders at the manager-of-manager level and

above using the following categories:

Promotable : able to make the turn to the next leadership level within two or three years. These individuals are high - potential.

Growth : able to do additional work, run other functions, or manage a broader organization at the same leadership level.

Well placed : having neither turn nor growth promotability.

The performance standards are the basis for making the judgment on

promotability.

Below the manager - of - manager level, leaders list their high - potential individuals,

rather than rating the promotability of everyone in their organizations. This is done

due to large numbers. The following defi nition is used to assist managers in identify-

ing high - potential individuals:

Sustained high performance . High - potential individuals have demonstrated sus- tained high performance over time.

Foundation skills . High - potential individuals possess a set of skills that allows them to grow quickly and adapt to different situations. These include drive/

ambition, strong interpersonal skills, presence, ability to learn and apply new

skills quickly, strong political/organizational skills, ability to adapt to change, and

resilience.

Ability to perform future leadership roles . High - potential individuals demonstrate the aptitude to perform the performance standards at the next level of leadership.

Assessment of the Talent In this step, successors and high - potential individuals are assessed by the external

industrial psychology fi rm using the process previously discussed. All successors and

high - potential individuals are not assessed in a single year. Rather, assessment data is

built over time, refreshing the assessment information as needed. Everyone who

is being reviewed by one of the executive talent review teams (described below) is

assessed. Others are assessed on an as - needed basis.

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252 Best Practices in Talent Management

Review of Individuals In this step, successors and high - potentials are reviewed by executive management for

the purpose of getting to know them and targeting development actions. Generally:

Successors for senior offi cer positions are reviewed by the Southern Company

CEO and his direct reports.

Successors for offi cer positions are reviewed by operating company or business

unit CEOs and their direct reports.

Other high - potentials are reviewed by department management.

Talent reviews are done slightly differently in each operating company, but usu-

ally consist of:

Review of the person ’ s background, education, and major accomplishments;

Information from the external leadership competency assessment;

Identifi cation of possible career path(s);

Identifi cation of major development needs; and

Identifi cation of development actions needed to accelerate development, such as

potential moves or assignments, development actions in current job, coaching/

mentoring, education, or participation in a specifi c leadership development pro-

gram or activity.

Each management council reviews twelve to sixteen individuals per year. Usually,

the candidate being reviewed meets with each council member prior to the review

meeting so that each executive can get to know him or her. Following the discussion,

the individual is provided feedback by council members, and the development plan is

modifi ed as needed. These individuals are tracked over time to make sure they are

receiving the development they need to prepare for new roles.

A new tool called a candidate profi le was developed to help identify the right

development actions. The candidate profi le compares an individual ’ s assessment

results to the specifi c job criteria listed on the success profi le discussed earlier. The

competency assessment is from the external assessment. Critical knowledge, skills,

and abilities are rated by people within the organization knowledgeable of the

person ’ s performance. Candidate profi les are used after a success profi le has been

completed and the assessment information is available. See Figure 13.5 for a sample

candidate profi le.

Succession planning begins during the fi rst quarter in the operating companies

and business units. They complete plans for all executive and director - level

positions and identify their high - potential individuals. Plans are created for other key

roles as needed.

Succession plans for the top sixty - fi ve positions across Southern Company are

consolidated and reviewed by the Southern Company CEO and his direct reports. This

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Southern Company 253

fosters cross - calibration of talent and a better understanding of the executive bench

strength across Southern Company. The Management Council also reviews executive

turnover and movement, potential executive retirements, and leadership demograph-

ics. Action plans are created to address emerging issues. The Southern Company CEO

reviews the succession plans of key executives with the board of directors.

FIGURE 13.5. Sample Candidate Profi le

POSITION: Manager, Distribution MANAGERIAL LEVEL: Manager of Managers

Key Job Challenges:

Critical Knowledge, Skills, and Abilities

Experiences

None Some Proficient

X

X

X

X

X

X X

X

X

X

X

X

X

A knowledge of distribution operations, including field work, applications, and restoration activities

None Some Proficient Committee involvement at the SoCo level would be beneficial since this position represents Distribution at the SoCo level Storm restoration experience

Good understanding of how each electric utility department works and their dependencies on each other. This also includes the dependencies of Operating Company to Operating Company

Experience in building consensus among different entities/groups

Solid understanding of budget activities/processes

General understanding of and familiarity with metering, fleet operations, and distribution planning

Knowledge of disaster preparation and restoration activities (internal and external) A technical knowledge of Distribution Systems and Equipment

Basic knowledge of Distribution coordination practices Basic knowledge of computer systems and programs that are used in Distribution Basic knowledge of accounting practices used in Utilities Basic knowledge of Distribution Indices like SAIDI, SAIFI, Customer Value Broad business knowledge

Low 1 2 3 4 5 6 7 8 9 10

Low-Mid Mid-Range High-Mid High Key Competencies

Deciding & Initiating Action Leading & Supervising Planning & Organizing Relating & Networking

Other Competencies Adapting & Responding to Change Critical Thinking

Persuading & Influencing

Entrepreneurial & Commercial Formulating Strategies

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254 Best Practices in Talent Management

LEADERSHIP DATABASE

All of the information related to succession plans and high - potentials is housed in

Oracle ’ s PeopleSoft application. The succession planning and career development

modules within PeopleSoft are used. Some modifi cations to the panels and standard

reports were made. This functionality enables us to:

Create and report succession lists for individual jobs;

Combine succession lists across companies to create and report system - wide suc-

cession slates;

Track high - potential people identifi ed during the succession process;

Track and report on individuals nominated for and completing leadership devel-

opment programs; and

Create employee profi le reports.

Security limits access to the information to specifi c human resource professionals

across Southern Company.

DEVELOPMENT ACTIVITIES

Southern Company uses a variety of methods to develop successors and high - potential

individuals. Job assignments, development moves, and special assignments are the

primary methods of development. Developmental assignments fl ow from succession

planning and management reviews. Development assignments are monitored at the

corporate/operating company/business unit level. As a practice, all open positions

below the executive level are posted on an internal job board. Development moves are

an exception to this practice and generally require executive approval.

Senior Leader Development Program A gap in development efforts was that high - potential middle managers were not pre-

pared to move into offi cer positions. An educational experience to address this need

was developed in 2008 jointly by Southern Company human resources and Duke

Corporate Education. This program, titled the Senior Leader Development Program,

was delivered in 2008 and 2009. The program is grounded by two sessions, four days

each. The program content focuses on:

Understanding how global, environmental, regulatory, and human capital chal-

lenges are impacting the future of the energy industry;

Examining methods to make objective, disciplined decisions in an increasingly

uncertain business climate;

Building strong networks of relationships to drive organizational change;

Developing capabilities to manage diversity, complexity, and ambiguity;

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Southern Company 255

Creating a vision of the future for self and the company; and

Articulating personal commitment to action.

A variety of learning components are incorporated in the program.

Presentations and discussions with Southern Company executives, university pro-

fessors, and external thought leaders;

Case studies;

Activities designed to help participants apply learning to current business issues;

and

Networking opportunities with fellow class participants and Southern Company

executives.

Participant feedback about the program was strong. Among the noted

highlights were

Interaction with and insights gained from Southern Company executives;

Networking and building relationships with peers from around the company;

Modules on fi nance, leadership presence, and diffi cult discussions; and

Opportunity for personal refl ection.

Later in 2009 each participant will be interviewed to gather feedback about the

impact of the program, specifi cally, how the learning is being applied to real business

and leadership issues.

Emerging Leader Programs Below the corporate level, operating companies and business units have the responsi-

bility for providing development activities and programs for high - potential emerging

leaders. These programs increase business acumen and leadership skills, leverage net-

working opportunities, and increase exposure to senior leaders. These programs typi-

cally last twelve to twenty - four months.

These leadership development activities and programs develop the following

leadership competencies.

Critical thinking;

Persuading and infl uencing;

Planning and organizing; and

Relating and networking.

Emphasis is also placed on the remaining fi ve leadership competencies, as well as

career development and business knowledge. The specifi c activities in these programs

vary based on specifi c business need. Following is a menu of activities that are used.

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256 Best Practices in Talent Management

Group mentoring sessions . Program participants are divided into small groups, and each group is paired with a senior executive. Mentoring groups generally set

their own agendas and focus on gaining business knowledge, career development,

and leadership knowledge and lessons.

Common education . Participants attend a defi ned set of educational activities focused at building core competencies.

Action learning . Participants take part in projects aimed at gaining business knowledge and leadership skills. Participants are divided into small groups, and

each group researches and makes recommendations on a specifi c business problem

or issue.

Forums . These are large - scale events focused on specifi c business and leadership topics.

Group discussions . Participants are divided into small groups wherein they discuss common topics. For example, the group may read and discuss a leadership

book.

EVALUATION AND LESSONS LEARNED

Evaluation Metrics to measure the effectiveness of leadership development at Southern Company

are evolving. The strength of the leadership bench is evaluated using the following

measures that come out of the succession planning process.

Percent of key roles with at least two ready now successors;

Average number of successors per key role;

Demographics of successor pool;

Percent of key jobs fi lled from succession list;

Number of cross - company and cross - functional executive moves; and

Projections of leader attrition.

Recently, Southern Company began entering information on high - potential indi-

viduals into PeopleSoft. At the completion of the current round of succession plan-

ning, the following additional metrics will be analyzed:

The size and demographics of the high - potential pool;

The number and type of high - potential job moves; and

Turnover of the high - potential pool compared to the overall pool.

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Southern Company 257

As additional data are collected from external assessments on executives, succes-

sors, and high - potential individuals, overall competency strengths and gaps will be

identifi ed to better target development programs.

Lessons Learned Critical to success was the ownership by the Leadership Action Council of leadership

development and the improvement of the process. Too often HR had tried to design

and implement systems without executive support and buy - in. Once the CEO estab-

lished the Leadership Action Council, the council members became the drivers of the

initiatives. They were able to get input and support from their “ home ” organizations as

well as look at what was best for Southern Company as a whole.

A second lesson learned was the necessity to simplify and integrate the various

parts of succession planning and leadership development. Simple things like tying

development and succession planning together enabled people to see the big picture.

Early in the process leaders said they were creating succession lists in one place, high -

potential lists in another, and planning development in a third. They did not see how

these activities connected until they were integrated. The language must be consistent

and the various tools and processes linked. The output of the external assessment proc-

ess, the success profi le, and the candidate profi le all have a similar look and use the

same set of competencies.

REFERENCE Charan, R., Drotter, S., & Noel, J. (2001). The leadership pipeline: How to build the leadership - powered com-

pany . San Francisco: Jossey - Bass.

Jim Greene is currently assistant to the senior vice president of human resources, diversity and inclusion at Southern Company. Prior to his current assignment, he was

director of executive succession and development. In this role he had responsibility

for leadership development strategy and processes, succession planning, executive

assessment, and executive development. Greene has spent twenty - three years at South-

ern Company serving in a variety of human resource roles. Prior to Southern

Company, he spent three years as a management consultant and ten years in mental

health/mental retardation. He holds a master ’ s degree in educational psychology from

the University of Florida and completed selected post - graduate work in educational

psychology and organizational behavior at West Virginia University.

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