Best Practices for Succession Planning

RT-325 Topic Summary
RT 325


Research Team 325 (RT-325) aimed to develop a general framework for succession planning for early to mid-level employees across the construction industry up to the level of Project Manager (PM), which is deemed to be one of the key positions of project delivery. The team conducted an extensive literature review on succession planning and surveyed 10 CII member companies on their current methodologies.

RT-325 focused on answering three key research questions:

  1. Which practices are most effective for identifying and preparing mid-career and early career employees to assume leadership roles? 
  2. Are there established practices in other industries that the project delivery industry can adopt that would meet a universal need? 
  3. Are there proven practices that are most effective for specific sectors of our industry?

The initial research suggested that current industry practices are deficient in identifying which employees have a high potential of performing well in a project management position. In order to improve this area of succession planning, RT-325 surveyed 110 project employees in an effort to identify behavior and personality traits that correlate with a high performance and potential to perform in a project management position.

The results of this research are two-fold: first, as a product of the literature review and company interviews, the team developed a six-phase, 24-step process to improving succession planning with an organization (see Implementation Resource 325-2); and second, as a product of the employee survey, the team identified three interview questions that will improve early identification of high-potential employees (see Research Summary 325-1). 

Key Findings and Implementation Tools

1 : Project Manager Age Distribution

The results of the literature review and the industry profiles reveal corresponding results: succession planning methodologies are highly needed in the industry, yet inconsistent across companies and research efforts. As proposed in Chapter 1, the industry is facing a massive talent shift. A demographic overview of 580 early to mid-level employees further justifies this idea. The results of the survey show that the median age of surveyed employees is approximately 51 years old, with the overall distribution highly favoring employees over the age of 50 (the largest group of employees ranging from 50 to 60 years old). The overall distribution box plot is shown in Figure 5.

(RS325-1, p. 13)
Reference: (RS325-1)

2 : Current Succession Plan Practices

RT-325 interviewed six CII member companies on their succession planning methodologies. The interviews showed that 50 percent of the companies had a formal succession planning process, but none of the six companies planned succession for entry to mid-level employees. The published literature echoed this finding.

Through the preliminary literature review, RT-325 was able to identify 25 different succession planning practices. The researchers utilized a four-step Delphi method to narrow the set of practices to the 15 that would have the greatest value to the construction industry, and then ranked them in order of importance. (See Table 1.) A focus group of 10 human resource executives from CII member companies was asked to identify which of these 15 practices were actively being implemented within their respective organizations. Table 1 lists the percentage of sampled CII companies implementing each practice in 2015. As can be seen in the table, some of the highest-rated practices were performed in less than half of the participating CII companies.

(RS325-1, pp. 14-15)

Reference: (RS325-1)

3 : Succession Planning Process

Drawing upon the literature search and its survey of CII member companies, RT-325 developed two tools that can improve succession planning within an organization. These tools are designed to provide a small suite of options to help organizations improve their succession planning processes with minimal added effort.
Tool 1: Succession Planning for Project Managers
RT-325’s first tool offers a guideline for implementing succession planning best practices. (The succession planning process is discussed fully in Implementation Resource 325-2, A Succession Planning Process for Identifying Project Managers, which offers an extensive look at each phase and its corresponding subsections.) The succession planning process centers on the following six phases:
  1. Plan – Have a formal plan for approaching successions, approved at the executive level. This plan should align with long-term business goals.
  2. Assess – Perform a gap analysis, in order to identify the current and future talent needs of the company, and to determine which roles or skills are needed to fill those needs.
  3. Identify – Evaluate the performance and potential of current employees, in order to identify candidates for succession.
  4. Prepare – After identifying a successor, implement a personalized development plan to give the potential PM any needed training and to monitor his or her progress.
  5. Transition – When the succession is ready to take place, introduce the successor to the responsibilities of the new role and provide any necessary mentorship.
  6. Measure – After the succession has occurred, track the performance of the new PM, to provide continuous improvement for future successions.
Figure 6 shows how these six phases form the backbone of the Succession Planning Process.

(RS325-1, pp. 17-18)
Reference: (RS325-1)

4 : Early Indicators of Success for Future Project Managers

RT-325 collected data from 113 employees across six CII member companies. The minimal sample size to ensure a 95-percent confidence level for this dataset was calculated to be 36; thus, 76 complete data vectors were more than enough to ensure validity. These data were analyzed statistically to correlate personality and behavior traits with the performance and potential ratings these employee received from their supervisors. The results of this analysis yielded two major conclusions:

  1. Performance ratings do not correlate with any specific trait measured by RT-325.
  2. The potential to become a PM closely correlates with three specific, measurable traits: managerial experience, influential behavior, and emotional bias.
(RS325-1, p. 20)
Reference: (RS325-1)

5 : Three Fundamental Filters that Identify Candidates

Supervisors can improve evaluations and interviews by using the following three traits identified by RT-325 research:
  1. Managerial Experience: An employee’s past experience in management or supervisory roles (i.e., multiple subordinates reported to the employee) is the best trait of the three for indicating the potential to perform well as a PM. In interviews and evaluations, supervisors should ask employees to quantify their past leadership experience in terms of years and number of employees supervised. The management experience could have been obtained in any industry, not only in construction.

    It is important to note that the supervisory role is different from the role of coordinator. In this context, a supervisor has the authority and responsibility for the performance evaluation of subordinates, while a coordinators does not. The RT-325 research found that, while the role of team coordinator may be a step toward promotion to supervisory positons, it does not correlate with the candidate’s performance as PM.
  2. Declared Influence: The behavior style of an influential individual is characterized by a tendency to persuade, convince, or influence others (as defined in DISC behavioral assessments; Jones and Hartley 2013). This individual thrives on social recognition and group activities. Employees with influential behavior tend to be outgoing, social, talkative, well-spoken, and animated, and an employee who shows declared influence behavior is more likely to become a high-potential PM.

    In interviews and evaluations, supervisors should ask employees about experiences in which co-workers or higher-ups did not agree with their positions. How did the employee respond then, and how would the employee respond in the future? If the employee seems comfortable defending his or her positions and is also comfortable working with others in group settings, he or she is more likely to become a high-potential PM.
  3. Emotional Bias: The tendency to rely on emotional intuition and personal relationships to make business decisions is negatively correlated with PM success. A highly sentimental emotional bias suggests the candidate has low potential to become a PM. In interviews and evaluations, supervisors should ask the employee for a personal experience in which he or she had to make a difficult decision that personally affected a co-worker (e.g., a firing, disciplinary action, or promotion) If an employee has a history of favoring his or her “friends,” he or she is unlikely to be a high-potential employee. If an employee is able to make business decisions without emotional bias, he or she is more likely to become a high-potential PM.
Each of these traits can play a critical role in expanding the talent pool to include employees who previously might have been overlooked. As these factors are more clearly understood, supervisors can adjust how they examine talent and make “the 2% extra effort” to include potential successors that otherwise might have been overlooked. The three significant traits can be taken into consideration during interviews of future employees or while evaluating current employees by following the flowchart shown in Figure 7.

(RS325-1, p. 22)
Reference: (RS325-1)

6 : Evaluate Performance and Potential with the 9Box Grid

The 9Box Grid is a proven tool most human resource professionals use in today’s market to help identify employee performance and potential. The Society of Human Resource Managers (SHRM) explains that the 9Box Grid is a simple table graph that rates “potential” on the y-axis and “performance” on the x-axis. The SHRM further explains that the 9Box Grid allows managers to easily view employees’ actual and potential performance. Individuals in the uppermost right are deemed high-potential candidates, while individuals in the lower left are considered to be “at-risk.” (See Figure 4.)

To implement the 9Box Grid, one needs to consider several key steps before assigning in which quadrant an employee should reside:

  • Performance History – Supervisors should obtain the employee’s past performance appraisals to identify the employee’s performance trend. Typically, appraisals over a three- to five-year period should suffice. Look for scores that show the ability to maintain an “exceed expectations” score over a period of time.
  • Impact on Others – Obtain observations of the employee from clients (internal and external), peers, subordinates, and others that work closely with him or her. This information can be acquired by completing a standard 360-degree appraisal. Look for feedback that shows a positive impact and the ability to maintain productive relationships at all levels.
  • Potential – Potential incorporates various skills and attributes of an employee that will lead to high performance in a new job position. Potential can be measured by the employee’s ability to learn and commitment to improving his or her skills through continual development and training. Superiors can also look for the attributes that will be required if the employee is to fill the current vacancy. In the case of PMs, companies can implement the RT-325 interview questions to identify high-potential traits.

(IR325-2, pp. 10-11)
Reference: (IR325-2)

Key Performance Indicators

Improved performance/achieved success

Research Publications

Successfully Planning for Project Manager Succession - RS325-1

Publication Date: 05/2017 Type: Research Summary Pages: 29 Status: Supporting Product

A Succession Planning Process for Identifying Project Managers - IR325-2

Publication Date: 05/2017 Type: Implementation Resource Pages: 27 Status: Tool

Best Practices for Project Manager Succession - RR325-11

Publication Date: 12/2016 Type: Research Report Pages: 128 Status: Reference

Presentations from CII Events

Plenary Session - Preparing for the Great Succession Recession

Publication Date: 08/2016 Presenter: Number of Slides: 11 Event Code: AC2016

Implementation Session - Preparing for the Great Succession Recession

Publication Date: 08/2016 Presenter: Number of Slides: 38 Event Code: AC2016