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Leadership Development: Who's Next?

Tracy Hart, CEO of the $121 million general-contracting company Tarlton Corp. in St. Louis wants to be prepared. So she is drawing up succession plans for each of Tarlton's six departments, which will eventually extend out ten years.

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The clock isn't exactly ticking at Tarlton Corp. Tracy Hart, CEO of the $121 million general-contracting company in St. Louis, is only 47 and works alongside three younger siblings. The family business is unlikely to suffer a sudden gaping void at the summit.

Still, Hart wants to be prepared. So she is drawing up succession plans for each of Tarlton's six departments, which will eventually extend out ten years. The goals are to prepare leaders who can take the business to the next level, give top talent a reason to sit pretty, and ultimately create a pipeline that will snake into the C-suite. Succession planning is also critical to sustain a culture lovingly nurtured for more than 60 years. "We will have a plan for the top leadership," says Hart. "Starting with the departments is a way to walk before we run."

Succession planning at Tarlton is a four-part process developed by Hart through reading, talking to other CEOs, and brainstorming with her executive team. She began by ranking the departments by maturity to determine where to focus first. The freshest face in finance has been with the company 10 years. The HR director, by contrast, is still wet behind the ears. "We looked at it as a natural progression, knowing we were going to have some retirements," says Hart.

Next: figure out what each department should look like. The construction industry is changing, says Hart. New leaders won't necessarily be doing the same things as their predecessors. For example, the safety department's mandate was once straightforward: prevent injuries. Increasingly, however, management must grapple with risk management calculations. "For each department we need to ask if there are things we haven't pursued but should," says Hart. "Maybe the former department head didn't need an MBA but the new one will. Do they need certifications that the current person doesn't have?" To help her envision the future workplace, Hart has been benchmarking best-in-class companies in construction and other industries, sometimes visiting their offices to see how things are done.

The third step is to identify future leaders. "That's pretty easy," says Hart. "Look at performance appraisals. Ask the supervisors, 'If you got hit by the bus tomorrow who would you want to see in your place? Who is showing fire in the belly?' You do it numerically and you do it by gut."

Having settled on up-and-comers for departments where the need is most pressing, Hart has embarked on the final step: creating personalized development plans. Depending on the department and the person, those plans may include everything from certification in green building to public speaking. (Because the program is so new, no employees are yet in a position to comment on how it has affected their lives.) "We're telling them there are no guarantees, but we think you've got something," says Hart. "So instead of just an annual development plan, here's where we'd like you to be in five years and here's where we'd like you to be in ten."

Hart believes that treating future leaders as individuals rather than a group will prevent resentment from brewing among other staff members. "You don't want to segregate them or people may think they don't have opportunities," says Hart. "It won't be, 'Time for the high-potential lunch and learn. The rest of you, sorry.'"

Last updated: Jun 8, 2010

LEIGH BUCHANAN is an editor-at-large for Inc. magazine. A former editor at Harvard Business Review and founding editor of WebMaster magazine, she writes regular columns on leadership and workplace culture.
@LeighEBuchanan




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