Succession Management at ICMA-RC

1. Succession Managementat ICMA-RC Date: October 21, 2008 Presented by:Catherine Leggett, CHRO, SVP of HR

2. Overview of ICMA-RC • The ICMA Retirement Corporation (ICMA-RC) was created in 1972 by the public sector for the public sector • Independent not-for-profit financial services organization • Provide retirement products and services and a full range of other investment options • Single focus—helping public employees build retirement security • 800,000 Public Sector Employees and 8,000 Plans • 738 Full-Time Associates Located in Washington, D.C. and around the country

3. Succession Planning at a Glance • What is the purpose of Succession Planning? • Succession planning allows an organization to develop a profile of current performance and leadership potential within identified levels across the Corporation allowing the organization to better plan for its future leadership needs and developmental actions. • Why Succession Planning? • The succession planning process creates opportunities to identify ways to grow capability in areas of strategic importance, enhancing senior management team depth, and improving performance and potential of talent.

4. Understand Business Strategy Identify Leadership Competencies Create Evaluation Tools Complete Data Inputs Succession Management Methodology Phase I: Preparing for Succession Management Understand the organization's overall philosophy, strategy, and culture. Review current succession management strategy and practices to determine the level of alignment with company strategy. Collect data and develop leadership competency model to differentiate between acceptable and superior performance by establishing clear expectations of behavior. Determine tools that need to be refined or developed and define the scope of activities necessary to build the tools. Some typical tools include: Talent Profile, Individual Development Plan, Organization Overview, Bench Strength Summary. Work collaboratively with HR and managers to ensure that all required tools are completed in preparation for succession management activities such as conducting the talent review.

5. Succession Management Methodology Bench Strength Summary Performance Potential Analysis Succession Chart Talent Profiles Phase II: Conducting the Talent Review Provides a fact based quantitative snapshot of the talent pool for Key Positions and helps identify the Key Positions, high-risk positions, and the depth and diversity of candidates for those Key Positions. Provides a realistic picture to guide succession management and appropriately focus on developmental activities for each candidate and segments employees into groups with similar requirements and priorities. Enables managers to understand the succession plan for Key Positions, to identify talent gaps, and to evaluate potential candidates through sources such as the Performance / Potential Matrix and the Talent Profile. Enables fact-based understanding of key individuals discussed during the review, and provides the information required to complete additional talent activities occurring throughout the organization.

6. Provide Feedback to Employees Create Development Plan Measure Effectiveness Succession Management Methodology Phase III: Follow-up & Ongoing Succession Management Provide feedback to employees from the Talent Review meeting. Define the development needs, actions, and assessment of employees in key positions. Determine strategy for ongoing evaluation and refinement of the program in response to any changes in both the internal and external business environment.

7. ICMA-RC Challenges • Solid Methodology • Consistent Communications Difficult • Designated Champion Required • Time Restraints & Complaints • Show Value Added

8. ICMA-RC Leadership Competencies & Definitions • Manages Vision and Purpose - Communicates a compelling and inspired vision or sense of core purpose. Talks beyond today. Talks about possibilities. Is optimistic. Creates mileposts and symbols to rally support behind the vision. Makes the vision sharable by everyone. Can inspire and motivate entire units or organizations. • Strategically Agile – Is future oriented. Anticipates future consequences and trends accurately. Can create competitive and breakthrough strategies and plans. Has broad industry knowledge and perspective. • Drives for Results – Can be counted on to exceed goals successfully. Is constantly and consistently a strong performer. Is very bottom-line oriented. Steadfastly pushes self and others for results. • Builds Effective Teams - Blends people into teams when needed. Creates strong morale and spirit in his/her team. Shares wins and successes. Fosters open dialogue. Lets people finish and be responsible for their work. Defines success in terms of the whole team. Creates a feeling of belonging in the team. • Motivates Others - Creates a climate in which people want to do their best. Empowers others. Invites input from each person and shares ownership and visibility. Makes each individual feel his/her work is important. Is someone people like working for and with. • Develops Direct Reports - Provides challenging and stretching tasks and assignments. Holds frequent development discussions. Is aware of each direct report’s career goals. Constructs compelling development plans and executes them. Pushes direct reports to accept developmental moves. Will take direct reports who need work. Is a “people-builder”. • Manages Diversity - Manages all kinds and classes of people equitably. Deals effectively with all races, nationalities, cultures, disabilities, ages, and both sexes. Hires variety and diversity without regard to class. Supports equal and fair treatment and opportunity for all. • Displays Integrity & Engenders Trust - Is widely trusted. Viewed as a direct, truthful individual. Does not misrepresent circumstances for personal gain. Keeps confidences. Readily admits mistakes when made.

9. ICMA-RC Leadership Competency Ratings Summary Instructions: Highlight most significant strength (bold) & development need (italicize) for each individual.

10. ICMA-RC Sample Succession Plan Senior Vice President/Title of Position Internal Succession Candidate(s) for Position: SVP External Succession Candidates: It may not be necessary to fill this position with an external successor. If an external search is necessary, is there an internal candidate who can serve in an acting capacity as an interim measure? Yes No Associate #1 and Associate #2, as an interim measure and with the current complement of subject matter experts, would be able to manage the Division. Current Potential Successor(s):

11. ICMA-RC Sample Succession Plan Senior Vice President/Title of Position Internal Succession Candidate(s) for Position: SVP Current Potential Successor(s):

12. Summary on Succession Management • Driven from the Top • Important & a Priority • Difficult to Maintain Momentum • Commitment from Champion • Buy-In of Leadership/Department Heads • End Result: Bench strength, retained, motivated, engaged, optimistic & more driven and aligned