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    Aug 05, 2023    |   Camille Labrie

Succession planning at its best: What we can learn from PepsiCo

leadership potential identification

3 minute read
Written by Justin Deonarine, I/O Psychologist

The search for potential is a challenging one that requires discipline in not letting the “I know a high potential when I see one” mentality win the day.
 – Allan Church and Sergio Ezama

A little-known fact about the Work Personality Index® Leadership Potential Report: The development process took years. There was a lot of consideration and care put into everything from the conceptualization to the interpretation of the results.

Throughout the development process, I was constantly looking for inspiration from effective succession planning programs. One always stuck out as an example: The LeAD program at PepsiCo. “Why is this a good example?”, you may ask. A team from PepsiCo published details and research from their program in The Leadership Quarterly, in which they revealed important considerations and highlights that you can harness in your own succession planning efforts.

Identify and develop high potentials, not just one or the other

PepsiCo’s publication identifies common traits within high potential frameworks. Many of these traits are objectively evaluated (e.g., cognitive abilities, approach to leadership, motivation) rather than subjectively evaluated (e.g., “How well do I know this individual?”). In their own succession planning efforts, PepsiCo uses tools such as 360-degree feedback assessments, cognitive tests, personality questionnaires, and simulation-based measures with individuals at various levels of the organization. Not only are they using objective information to drive decision-making, they are also considering more than one level of the organization when building their leadership pipeline.

They also understand that development is just as important as identification. Based on the results, individuals are provided with one-on-one coaching based on their individual needs. This provides advantages over broad training (or courses) that try to develop the same skills for everyone. In this approach, they are able to address unique challenges that can derail a leader’s performance.

Harnessing success indicators

A different article from Allan Church and Sergio Ezama (members of PepsiCo’s team) revealed the success indicators that they track and measure. Some of these indicators include:

  • Stronger individual performance ratings, sustained over time.
  • Successful improvement against individualized growth objectives. (Individuals meeting their development goals are often promoted quicker as a result.)
  • Feeling engaged and supported by the organization, and possessing career clarity.

A transparent approach to high potential development

From concerns of entitlement to turnover, many organizations are weary of the impacts of telling high potentials their status. Despite many studies suggesting that transparency is a key component to a successful high potential program, Church and Ezama indicate that 66 percent of large companies are secretive about their succession practices.

PepsiCo’s data indicates that transparency can work if you are clear about what you are telling people and why. It is important that everyone who participates in a succession planning program feels that they are engaged and learning from the experience, whether or not they are promoted in the end.

Succession Planning Playbook Cover When developing a great succession planning initiative, the advice here is only one piece of the puzzle. Our Succession Planning Playbook provides more information to consider when building or refining your organization’s succession efforts.
View Succession Planning Playbook

Filed under: Leadership Development