Succession Planning and Knowledge Management

Tackle what seems like an uphill battle

Jake Smithwick, PhD, FMP, SFPThe Simplar Institute

University of North Carolina at Charlotte

• Group of researchers and educators

• Integrated within the parties (clients/buyers and vendors)

• Developed tools, methods, & training to enhance:

– Organizational Transformation

– Procurement & Sourcing

– Project & Risk Management

– Operational Efficiency

– Human Dimensions

– Performance Measurements

– Benchmarking & Workforce

– Facility Management Professional Training

Simplar Institute

• Knowledge Inventory built on a career of successes and failures,

• Knowledge provides:– operational efficiency

– foster innovation

– reduce errors

What Are We Actually Talking About?

Knowledge Management

Why We Need to Address It

Strategic Issues Challenges

• Reduced efficiency and an increase in critical errors

• Inhibits innovation

• Reduces the ability to pursue growth strategies

• Industry keeps growing.

• Finding new FM talent is a challenge

• Maintaining a head count guarantees a net loss of an organization’s knowledge

Construction Industry Institute (CII). (2013). Transferring Experiential Knowledge from the Near-retirement

Generation to the Next Generation (No. 292–1). University of Texas at Austin.

Average Age in Construction

36

37

38

39

40

41

42

43

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

Ave

rage

Age

SOURCE: Data Ferret – Current Population Survey, U.S. Bureau of Labor Statistics.

Construction Demographics

SOURCE: Data Ferret – Current Population Survey, U.S. Bureau of Labor Statistics.

15

19

23

27

31

35

39

43

47

51

55

59

63

67

71

75

79

Age

2014

2007

• National Healthcare Facility Director Study – 217 unique directors and healthcare systems (US only)

• 57% Healthcare FM workforce will be retiring with 10 years– 35% in 5-10 years– 22% in less than 5 years

• Average experience prior to being a Healthcare FM – Build Tradesperson: 10yrs trade + 3yrs Management– Facility Professional: 5yrs trade + 7yrs Management– Construction Professional: 10yrs trade + 9yrs Management

• Average of 5 years to advance from entry level Healthcare FM

Key Healthcare FM Info

• Traditional approach: promote mid-level employees to senior positions

• An adjustment is needed – the “bubble” is addressed, but experiential knowledge loss is a problem

Filling the gap is only half the battle

Space Managed (SF)Entry-level FMs

(avg.)O&M Staff (avg. range)

<500,000 1 1-10

500,000 - 1,000,000 2 11-50

1,000,001 - 2,000,000 2 11-50

2,000,001 - 4,000,000 5 51-100

4,000,001 - 7,000,000 7 101-200

>7,000,000 10 201-500

General Healthcare FM Staffing

More than 80% of Healthcare FM staff is in-house

Spend on Works Orders highly correlated to FTEs

Research Methodology

➢ Interviewed twelve

contractors who

recently experienced

leadership transition.

➢ Analyzed data for

trends, insights, and

bright spots.

➢ Review existing books,

papers, etc.

Some research in the area

Perrenoud, A. J., & Sullivan, K. T. (2016). Analysis of Executive Succession Planning in 12 Construction

Companies. International Journal of Construction Education and Research, p 1–17.

https://doi.org/10.1080/15578771.2016.1143892

Findings

➢ Typical Successful Plan Duration - 9 yrs

➢ Planning & Selection - 2 yrs

➢ Preparing the Successor - 3 yrs

➢ Transitioning & Mentoring - 4 yrs

➢ Poor/unexpected health issues leading factor to succession

and high correlation to difficulties with transition

➢ Average successor had 15yrs experience & was 45yrs old.

Findings

Findings

➢ 100% of companies used outside consultation

➢ 30% used a succession consultant to assist with positive

internal relationships during the transition

➢ 50% lost senior leadership as a result of the transition

➢ Average loss was 1/3 of senior leaders

➢ half left due to selection, 33% due to new boss’

management style

Findings cont’d

Knowledge Retention

Prepare Assess Plan Execute Monitor

Knowledge Retention Program

Construction Industry Institute (CII). (2013). Transferring Experiential Knowledge from the Near-retirement

Generation to the Next Generation (No. 292–1). University of Texas at Austin.

OrganizationSubject

AreaSubject Experts

• 1) Prepare for Knowledge Retention program– Support infrastructure

–Program scope

–Objectives

–Align internal team

Get Ready

Prepare Assess Plan Execute Monitor

See Where You’re At

• 2) Business Unit Demographic Analysis– identify need to experiential knowledge mgmt.

• 3) Confirm Feasibility for Continued Efforts

• 4) Prioritize areas for Knowledge Retention–what is the FM units “bench strength”

Prepare Assess Plan Execute Monitor

Make a Plan

• 5) Understand the Environment– identify need to experiential knowledge mgmt.

• 6) Identify What Knowledge to Transfer

• 7) Prepare a Business Case– identify the effort required, benefits, and cost

Prepare Assess Plan Execute Monitor

Let’s Get Going!

8) Develop Implementation Plan

9) Begin Implementation– collect lessons learned as you go!

Prepare Assess Plan Execute Monitor

See It Through to the End

10) Monitor Effectiveness– continuous improvement

– ensure goals are met

– what can be done for next time

Prepare Assess Plan Execute Monitor

This is really all about PEOPLE

• Benchmarking High Performers and High Potentials – top to bottom –currently focused on engineering and construction professionals

• Measuring performance, attributes, personalities, and aptitudes

• Fast Tracking, Preparation, and Transition

• Laser-guide Talent Development– Identify the skills gap: best v. normal

– Determine what can/cannot be taught

– Train and educate what you can

CII Research Right Now

• Talent identification & development + training

• Industry expertise

• But more than anything… this is organizational change

Things To Immediately Consider

• Hire the Right Talent– Increased probability of finding employees who are the right “fit”

• Identify Existing Talent– Assess likelihood of success

• Retain Talent– Grow employees to achieve their maximum potential

How might these be used?

• Benchmarking Human Dimensions for High Performers

• Benchmarking Human Dimensions for High Performing Teams

• Benchmarking Organizational Performance and Production

• Early Identify Future High Performers

• Laser-Guided Talent Development

• Organizational Mapping

Profile & Benchmarking

Over 30 Master Degrees and 4 PhD Dissertations–What Psychological Tools are Available

–How to Assess People and Teams

–How to Collect Data

–What Data to Collect

Top 3 Tools Identified–HEXACO

– Emotional Intelligence

–DISC

Road to Today

Six major dimensions of personality categorized further into four facets

HEXACO Personality Inventory

HONESTY-HUMILITY

Sincerity

Fairness

Greed Avoidance

Modesty

EMOTIONALITY

Fearfulness

Anxiety

Dependence

Sentimentality

EXTRAVERSION

Social Self-Esteem

Social Boldness

Sociability

Liveliness

CONSCIENTIOUSNESS

Organization

Diligence

Perfectionism

Prudence

AGREEABLENESS

Forgivingness

Gentleness

Flexibility

Patience

OPENNESS TO EXPERIENCE

Aesthetic Appreciation

Inquisitiveness

Creativity

Unconventionality

- Each facet and dimension measured on a scale of 1 to 5

- 100 questions

- Respondents indicate agreement or disagreement with various statements

- Developed by Ashton & Lee

• Four primary skills under two main competencies: personal competence and social competence, measured from 1-100

Emotional Intelligence Appraisal

Personal Competence

SELF AWARENESS

SELF MANAGEMENT

Social Competence

SOCIAL AWARENESS

RELATIONSHIP MANAGEMENT

QDISC-101

• Individualized reports created for every respondent

• Report provides a detailed insight into an individual’s personality type

• Each assessment illustrates how the individual’s personality compares with the rest of the organization, and the overall industry

• Where information about the best-in-class in the industry is available, the report provides insight into how the individual compares against the best-in-class

Customized Individual Reports

Customized Individual Reports

Enhanced Decision Making

HiPerf PM

Honesty 3.21

Emotionality 2.99

Extraversion 3.33

Agreeableness 2.75

Conscientiousness 3.71

Openness 2.9

EQ 71

MBTI ESTJ

DISC D

“Susan”

Honesty 3

Emotionality 2.65

Extraversion 3.9

Agreeableness 3.56

Conscientiousness 4.12

Openness 2.12

EQ 68

MBTI ISTJ

DISC D

Honesty 3.78

Emotionality 2.84

Extraversion 3.45

Agreeableness 2.89

Conscientiousness 3.89

Openness 3.02

EQ 72

MBTI ISTJ

DISC D

“Larry”

Honesty 4.51

Emotionality 3.12

Extraversion 3.45

Agreeableness 3.32

Conscientiousness 2.99

Openness 2.56

EQ 78

MBTI ISFJ

DISC D

“Bob”

94% 85% 78%Aptitude Match

• Significantly Higher Extraversion– Enthusiastic

– Confident

– Positive

• Significantly Higher Conscientiousness – Organized

– Disciplined

– Precise

• Significantly Higher Altruism – Sympathetic

– Generous spirit

– Soft-hearted

Top Performers - Individuals

• Problem:– Contractors and Designers typically pick their team for a project based on

who is available at the time, not necessarily who is the best match for the owner’s personnel.

Team Performance – Case Study

• HEXACO – Honesty-Humility

Emotionality

Extraversion

Agreeableness

Conscientiousness

Openness

Self Awareness

Self Management

Social Awareness

Relationship Management

Overall Emotional Quotient

Team Performance – Case Study

Organizational Profile Mapping

Organizational Benchmarking

• How do you stack up?

• Use of human dimensionality through advanced psychological tools will enhance the decision-making in:– Identifying key talent (if allowed by the organization)

– Talent development

– Creating optimized teams

– Assigning teams to clients based on compatibility

– Identifying whom to promote

– Identifying whom to retain based on potential

– Identifying like-for-like replacements if a team loses a member

• This helps an organization become more sustainable

• If done for long enough, human dimensionality can be used to make better decisions

What does this all mean?

FM Training & Credentials

• 70% of organizations rate IFMA credentialed employees as having significantly higher performance

• For every $2,000 that a company spends on an employee to get trained/credentialed, they experience a 12% increase in employee performance on average– The average cost of 1% enhancement in employee performance is $164

• The average training for an IFMA credential results in more than a 40% increase in employee performance

Key Finding: Organizational Impact

FM Education & Training

• ASU FM Professional Training (also FM Master Degree available)– FM Core Courses (applied certificates)– IFMA FMP Prep Course– Building Information Modeling Courses

• Deliverables/projects are designed from the everyday tasks an FM performs

• Participant works on the deliverables/projects throughout the courses integrated into their job functions, buildings, and organizations

• Deliverables/projects are reviewed by the participant’s supervisor as well as an industry panel to further optimize and deliver value to their immediate job function.

• Expert professionals & teachers: numerous FM Experts, IFMA Fellows, etc. on curriculum

Non-Degree Programs Offered

• 100% online

• Self-paced

• Taught by– Industry

– SME’s

– IFMA Fellows

• Very high Satisfaction

Visit: https://pdt.engineering.asu.edu/

Participants Include…

Summary

• Not capturing the sum & substance of the predecessor

• No mentorship period after transition (or “too much”)

• Focusing too much on ownership/financial issues & not enough on leadership & organizational issues

• Not being prepared or last minute planning

• Only 40% of companies have a succession plan in place

Lessons Learned

Recommended Readings• Books

❑ To prepare yourself

– Succession: Are You Ready? (Marshall Goldsmith)

❑ To prepare the large corporation

– Effective Succession Planning 5th Edition (William J. Rothwell)

• Journal Articles– Passing the baton: The importance of sequence, timing, technique and

communication in executive succession. (Journal of Business Venturing, Vol. 17)

• Simplar Blog Posts [construction business focused]

– http://letstalkbusiness.net/some-company-founders-forget/

– http://letstalkbusiness.net/success-ion/

– http://letstalkbusiness.net/you-are-the-company/

Questions

Jake.Smithwick@uncc.edu