Integrated Data Supports AT&T's Succession Planning

September 1, 1992
Your business is changing. The complexity of the requirements needed of top managers grows daily. It's your job to sort out the myriad of qualifications and development needs of these people and help your organization make the right decisions about succession planning. Gone forever are the days of eenie-meenie-miney-moe.

At Basking Ridge, New Jersey-based AT&T, a microcomputer-based succession-planning system that's linked to other management staffing and development systems worldwide helps HR support these decisions about the successors to key leadership positions. It also assists one of the world's most rapidly changing organizations in planning development activities that mold new leaders.

The system provides the succession-planning function with data on up-and-coming candidates for key leadership positions. It also provides members of top management with answers to such questions as:

  • What are the key leadership requirements that are linked to future business strategy?

  • How are successors assessed?

  • Who's qualified to move into a given position?

  • How do qualified successors compare in terms of their readiness?

  • Are managerial skills and talents enterprisewide adequate to the needs of new business strategies in a given business unit or for a specific position?

  • What are the relationships between assessment results, developmental activities, experience and other factors?

  • What are the gaps between training, skills, experience or other factors, and the requirements of leadership positions, now and in the years ahead?

In addition to holding vast amounts of information on AT&T's leadership needs, key positions, individuals and development activities, the customized system, called Succession Plus and acquired from Nardoni Associates, is linked systematically with other AT&T staffing and management development systems that have been redesigned in a similar way to meet new organizational goals. It's also linked with them conceptually, which means it uses identical definitions of the position requirements, developmental activities, technical skills, management skills and other data.

Why the change?
The need for a new approach to management development and succession planning at AT&T became evident at the time the company divested itself of the Bell System operating companies and was allowed to enter new lines of business, such as computers. The predivestiture AT&T had more than one million employees in the U.S. Today's global organization has only slightly more than 350,000 employees. Other differences between the old organization and the new one include:

  1. The old organization was a stable telecommunications monopoly, which had relatively well-defined, homogeneous skills requirements. The new company is a diverse, competitive organization that must develop new products and manage mergers and acquisitions, both within the U.S. and globally.

  2. The divestiture of 23 operating companies has left the new AT&T without its traditional source of new corporate leadership.

  3. The career development environment, which was marked by lifetime employment and widely understood progression within the company, is now complex, and new lines of business require a willingness to hire needed management skill and talent from external sources.

  4. The company now has new business objectives and strategic goals that accompany the global expansion. It has new customers and new competitors, new business partnerships that were made possible by divestiture, and shifts in suppliers. (For example, AT&T's Western Electric at one time manufactured the lion's share of all Bell System equipment.)

AT&T went from being a stable monopoly, having had a 100-year history of employment practices and policies in the U.S., to being a diversified and entrepreneurial company that operates now in more than 100 countries world-wide. Its employment policies and management-development practices now are shaped by new global strategic objectives.

Top management in the new AT&T needed a succession-planning approach that would be more than the management-replacement system that traditionally had filled key leadership positions. A more flexible, broader, more data-intensive system was needed that would link new management development needs to global strategic plans and ensure that companywide skills would be identified and developed as needed. AT&T had specific requirements that drove the acquisition and customization of the microcomputer-based succession-planning system. Each of these general criteria had special meaning for AT&T's planning system. At the same time, however, each is a systems requirement that most organizations considering a succession-planning system probably would want to incorporate into a computerized system. This is especially true in large or complex organizations having changing and increasingly demanding global management-staffing objectives.

Data capacity.
One requirement was data capacity, to permit the capture, storage and retrieval of extensive amounts of information on individuals and positions. One of the central reasons for having a separate succession-planning system is usually the need for application-specific data—information that's unique to succession management and not collected or stored elsewhere in the HRIS. Moreover, succession-planning systems are usually data-intensive. The number of employees and positions covered may be relatively small—usually only involving 2% to 5% of the people and jobs in the organization. The volume of information on each employee and position included can be much larger than other systems normally need to handle. Decision makers in succession planning usually need to know a great deal of information about the skills of individual managers and the requirements of leadership positions. This volume of information is handled best by using a succession-planning system.

These data requirements included information in two linked data bases:

  • Individual files on incumbents and successors

  • Data on key leadership positions.

Information about managers is found in files of as many as 30,000 characters per candidate. Included in these files are:

  • Basic employee information, such as name, Social Security number, demographic data and other information that has been downloaded from the corporate HRIS

  • Resume data, such as job history and educational data, which also may be provided by the mainframe HRIS

  • Assessment of strengths and weaknesses, including narrative descriptions that qualify or explain assessments

  • Career and leadership development needs drawn from assessments and position requirements

  • Development plans for the year

  • Training taken or planned

  • Skills and functional expertise of the manager, such as language proficiency or technical skills

  • Targeted positions—positions that lie ahead in this successor's anticipated career path.

Each key leadership position at AT&T is represented in the system by a file containing such basic position information as job title and location, position requirements for today and the future, and a listing of potential successors to this position, each with a list of his or her qualifications to assume the position.

Links to other systems.
Another requirement of the new system was the capability of linking to other systems, both functionally—in terms of staffing concepts and procedures—and technically, to assure efficiency. From the outset, the succession-planning system at AT&T was conceived as part of an enterprise-wide management staffing and career-management system.

Basic biographical personnel data and other information on individuals can be downloaded automatically to the succession system from the corporate HRIS. In addition, other management systems and programs are driven consistently by the needs identified through the succession-planning efforts, as well as by the definitions of skills, development activities and other key data elements that are available through the system.

The other major AT&T management systems are leadership development and executive strategic staffing systems. Leadership development focuses on individual career management development and career planning. Executive strategic staffing analyzes and tracks high-potential candidates companywide and produces candidate slates and alternative staffing scenarios for positions of leadership in all business units globally.

The conceptual linkage of succession planning to these and other systems produces several benefits. For example, when succession or other work force movement diminishes the size of the candidate pool for a critical leadership position in the succession-planning system, high-potential candidates throughout the organization can be reviewed in search of new successors, based on criteria that are consistent across these systems.

The conceptual integration of all management systems also fosters the wide-spread acceptance and understanding of management staffing and career-development systems at AT&T. Virtually all AT&T managers worldwide will use them for their own career development planning. This premise was basic to the development of these systems at AT&T.

A third requirement was the flexibility of an evolutionary system that could grow and change in response to the changing needs of management. Among packaged micro-based succession-planning systems, the vendor product selected by AT&T for customization has an unusually high capacity for data in preprogrammed fields, scores of optical fields for new data elements and variable field lengths. It's essentially table-driven, which permits the inclusion of virtually limitless sets of data in tables that are linked to the system.

The planning system is based on a dynamic, flexible view of successor development and selection that corresponds with AT&T's dynamic, flexible approach to succession planning. This view has two central perspectives:

  • Successors to any one position should come from a pool of qualified candidates, rather than from inevitable or heir apparent successors who are locked rigidly into an inflexible career path

  • Developmental activities are long-term as well as short-term, and will change and expand as organizational objectives change.

When a pool of candidates is identified for each critical position, the need for the data intensity and mechanized processes of a computerized system is even more apparent. Each member of the pool of candidates for a given position, for example, also may be a candidate for other positions, and each candidate is an incumbent, so there's also a pool of candidates for his or her position. The system selected includes a succession ripple feature, which automatically identifies in advance the ripple effects of any move, to permit what if modeling during the candidate-selection process.

In addition, the software that was selected permits the identification of states of readiness of each candidate in the pool. Typically, key leadership positions have a range of requirements and both short-term and long-term developmental goals. Not all managers in the pool will be equally ready to assume a position at the same time.

In this system, candidates are identified both by codes reflecting their readiness and by the specific requirements they lack for succession. Accelerated management development can speed the preparation of individual managers for succession when required.

Security was another requirement of the new system. The privacy of information in a succession-planning system is a key reason for installing separate modules or subsystems of the HRIS. At AT&T, only staffers at corporate succession planning have direct access to the system. Access is limited through functional codes and passwords, which are changed periodically.

Report-writing capabilities.
Ad hoc report-writing capabilities also were required, to permit a few staffers to respond quickly to the requests for information from many managers, without delays or the need for each manager to have direct access to the system. A succession-planning system should be able to produce ad hoc reports, but to address the need for security, it should limit online users exclusively to the variety and diversity of information requests that managers and analysts might make of the system on a day-to-day basis.

The Nardoni Associates, Inc. (NAI) system chosen by AT&T, uses the R&R Report Writer from Concentric Data System. The R&R Report Writer can be learned easily during two-days' training provided by NAI trainers. This report-writing system permits the user to:

  • Create a variety of report formats, including simple columns, grouped summaries, multiline or full-page formats, and graphics

  • Link data from a number of different data bases—including the corporate HRIS—in one report

  • Save and catalog one-time reports for later use, in case the same or a similar request is made later.

Because most managers who seek ad hoc reports are busy, senior-level executives, to whom "a picture is worth a thousand words," graphics capability usually is an important feature in a succession-planning system. Charts, graphs and a range of other graphics that illustrate data relationships are printed on a laser printer to support and clarify data. By using the ad hoc report writer, succession-planning staffers can respond quickly and accurately to managers' requests for data on trends, charts showing relationships, and lists sorted by special characteristics, or provide other reports in a virtually limitless array of formats and relationships.

Some examples of data an ad hoc report might show are:

  • Who at a certain level in the company is fluent in the French language and is available immediately to fill a sudden opening in Paris

  • Which trends are evident in turnover rates of high-potential employees, and how turnover rates relate to such factors as salary ranges, age, or length of service or other factors

  • How managers differ in the ratings they give during performance appraisals

  • Where blockages (too many candidates for specific positions) exist in succession plans, or where there are too many positions available for the number of suitable applicants

  • How the candidate pool measures up to the job requirements of a given position and which developmental activities should be intensified or more frequently scheduled to improve the readiness of successors.

A final, but crucial, requirement of the system was ease of use, so no outside support would be needed to use and maintain the system.

AT&T is assured of having continuity in leadership at the top of the organization by having a flexible system that will continue to evolve as organizational objectives change. By linking the succession system to other corporate systems—including the corporate HRIS, leadership development and career-management systems—the company achieves both systematic efficiency and consistency in the application of business strategies.

Personnel Journal, September 1992, Vol. 71, No. 9, pp. 103-109.