Human Capital: Insights for U.S. Agencies from Other Countries' Succession Planning and Management Initiatives
Published: 2003-09-15T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Leading public organizations here and abroad recognize that a more strategic approach to human capital management is essential for change initiatives that are intended to transform their cultures. To that end, organizations are looking for ways to identify and develop the leaders, managers, and workforce necessary to face the array of challenges that will confront government in the 21st century. GAO conducted this study to identify how agencies in four countries--Australia, Canada, New Zealand, and the United Kingdom--are adopting a more strategic approach to managing the succession of senior executives and other public sector employees with critical skills. These agencies' experiences may provide insights to executive branch agencies as they undertake their own succession planning and management initiatives. GAO identified the examples described in this report through discussions with officials from central human capital agencies, national audit offices, and agencies in Australia, Canada, New Zealand, and the United Kingdom, and a screening survey sent to senior human capital officials at selected agencies.
section_title: What GAO Found
paragraphs: Leading organizations engage in broad, integrated succession planning and management efforts that focus on strengthening both current and future organizational capacity. As part of this approach, these organizations identify, develop, and select their human capital to ensure that successors are the right people, with the right skills, at the right time for leadership and other key positions. To this end, agencies in Australia, Canada, New Zealand, and the United Kingdom are implementing succession planning and management initiatives that are designed to protect and enhance organizational capacity.

section_title: Letter
paragraphs: Leading public organizations here and abroad recognize that a more  strategic approach to managing human capital should be the centerpiece of  any serious change management initiative to transform the cultures of  government agencies.  Such organizations recognize that they need both  senior leaders who are drivers of continuous improvement and who  stimulate and support efforts to integrate human capital approaches with  organizational goals, as well as a dynamic, results-oriented workforce with  the requisite talents, knowledge, and skills to ensure that they are equipped  to achieve organizational missions.Leading organizations are looking for  ways to identify and develop the leaders, managers, and workforce  necessary to face the array of challenges that will confront government in  the 21st century.
We are seeing increased attention to strategic human capital management  and a real and growing momentum for change.  The Congress required  agencies in the federal government to establish a chief human capital  officer in legislation creating the Department of Homeland Security  enacted in November 2002. One of the officer’s functions is to align the  agency’s human capital policies and programs with organizational mission,  strategic goals, and performance outcomes.  We have reported that some  U.S. agencies have begun to take steps to more closely integrate their  human capital and strategic planning processes and hold both human  capital professionals and operational managers accountable for  accomplishing organizational missions and program goals. More recently,  the Office of Management and Budget revised Circular A-11 to require that  federal agencies’ fiscal year 2005 budget submissions as well as their  annual performance plans prepared under the Government Performance  and Results Act identify specific activities such as training, development,  and staffing that agencies plan to take to ensure leadership continuity.  In  addition, as part of the Administration’s efforts to implement the  President’s Management Agenda, the Office of Personnel Management  (OPM) set the goal that continuity of leadership and knowledge is assured  through succession planning and professional development programs in  25 percent of all federal agencies by July 2004.  OPM also identified the  need for agencies to reduce any current or future skill gaps in mission  critical occupations and leadership positions.
We previously reported that other countries have faced challenges in  managing their human capital and, in particular, managing individual  performance. In addition, other countries face a variety of succession- related challenges.  For example, Canada faces a public service workforce  with about 80 percent of both its executives and executive feeder groups  eligible to retire by the end of the decade.  The United Kingdom faces the  challenge of increasing the representation of ethnic minorities among its  senior executives and has established a goal of doubling the percentage of  minority representation from 1.6 percent in 1998 to 3.2 percent by 2005.  New Zealand found that past arrangements for the governmentwide  development of its senior leaders have not worked, resulting in a shortage  of fully prepared candidates for public service leadership positions.  To  address this shortage, the government has recently launched a new  strategic senior leadership and management development initiative.  Finally, Australia’s central federal human capital agency recently reported  on the changing career expectations among employees and the possible  attrition of experienced high-potential employees as two succession- related challenges to government performance in the future.
At your request, this report identifies how agencies in four countries—  Australia, Canada, New Zealand, and the United Kingdom—and the  Canadian Province of Ontario are adopting a more strategic approach to  managing the succession of senior executives and other public sector  employees with critical skills.  To identify these practices, we reviewed the  literature associated with succession planning and management; found  examples illustrating these practices through the results of a screening  survey; analyzed written documentation; and interviewed cognizant  officials about the identified examples.  See appendix I for additional  information on our objective, scope, and methodology.
subsections: section_title: Background
paragraphs: Many federal agencies have yet to adopt succession planning and  management initiatives.  In 1997, the National Academy of Public  Administration reported that of the 27 agencies responding to its survey,  2 agencies had a succession planning program or process in place; 2  agencies were planning to have one in the coming year; and 4 agencies  were planning one in the next 2 years. In 1999, a joint OPM and Senior  Executive Association survey reported that more than 50 percent of all  career members of the Senior Executive Service (SES) said that their  agencies did not have a formal succession planning program for the SES,  and almost 75 percent said that their agencies did not have such a program  for managers. Of those who reported that their agencies did have  succession planning programs for either executives or managers, 54  percent of the career senior executives said that they had not participated  in the executive-level programs and 65 percent said they had not  participated at the manager level.  On the basis of this survey and anecdotal  evidence, OPM officials told us in 2000 that they found that most agencies  would not likely have a formal, comprehensive succession plan.
Further, we have reported that a lack of succession planning has  contributed to two specific human capital challenges currently facing the  federal government.  The first challenge is the large percentage of career  senior executives who will reach regular retirement eligibility over the next  several years.  In 2000, we reported that 71 percent of the SES members  employed as of October 1998 would reach regular retirement eligibility by  the end of fiscal year 2005. More recently, we estimated that more than  half of the SES members in federal service as of October 2000 will have left  the government by October 2007. We concluded that without careful  planning, these separations pose the threat of an eventual loss in  institutional knowledge, expertise, and leadership continuity.
The second challenge facing federal agencies impacted by a lack of  succession planning is the amount of diversity in their executive and  managerial ranks.  As the demographics of the public served by the federal  government change, a diverse executive corps can provide agencies with  an increasingly important organizational advantage that can help them to  achieve results.  We have reported that, as of 2000, minority men and  women made up about 14 percent of the career SES.  If current promotion  and hiring trends continue, the proportions of minority men and women  among senior executives will likely remain virtually unchanged over the  next 4 years.
The literature shows that public and private sector organizations use a  range of approaches when planning for, and managing, succession-related  challenges.  These approaches span a continuum from the “replacement”  approach, which focuses on identifying particular individuals as possible  successors for specific top ranking positions, to the “integrated”  succession planning and management approach.  Under the integrated  approach, succession planning and management is a strategic, systematic  effort that works to ensure a suitable supply of potential successors for a  variety of leadership and other key positions.  These two approaches  essentially reflect a shift in emphasis of succession planning from a risk  management tool, focused on the near-term, operational need to ensure  backup people are identified in case a top position becomes vacant, to a  strategic planning tool, which identifies and develops high-potential  individuals with the aim of filling leadership and other key roles in the  future.
GAO, similar to other federal agencies, faces an array of succession  planning challenges.  The succession planning and management approach  we are using to respond to our internal challenges is consistent with the  practices we identified in other countries.
section_title: Other Countries’ Selected Practices to Manage Succession
paragraphs: To manage the succession of their executives and other key employees,  agencies in Australia, Canada, New Zealand, and the United Kingdom are  implementing succession planning and management practices that work to  protect and enhance organizational capacity.  Collectively, these agencies’  succession planning and management initiatives receive active support of top leadership;  link to strategic planning;  identify talent from multiple organizational levels, early in careers, or  with critical skills; emphasize developmental assignments in addition to formal training; address specific human capital challenges, such as diversity, leadership  capacity, and retention; and facilitate broader transformation efforts.
subsections: section_title: Receive Active Support of Top Leadership
paragraphs: Effective succession planning and management programs have the support  and commitment of their organizations’ top leadership.  Our past work has  shown that the demonstrated commitment of top leaders is perhaps the  single most important element of successful management. In other  governments and agencies, to demonstrate its support of succession  planning and management, top leadership (1) actively participates in the  initiatives, (2) regularly uses these programs to develop, place, and  promote individuals, and (3) ensures that these programs receive sufficient  financial and staff resources, and are maintained over time.
For example, each year, the Secretary of the Cabinet, Ontario Public  Service’s (OPS) top civil servant, convenes and actively participates in an  annual 2-day succession planning and management retreat with the heads  of every government ministry.  At this retreat, they discuss the anticipated  leadership needs across the government as well as the individual status of  about 200 high-potential executives who may be able to meet those needs  over the next year or two.  Similarly, in New Zealand, the State Services  Commissioner—an official whose wide-ranging human capital  responsibilities include the appointment and review of public service chief  executives—developed, with the assistance of a group of six agency chief  executives who met regularly over a period of 2 years, a new  governmentwide senior leadership and management development  initiative.  This effort culminated in the July 2003 roll out of the Executive  Leadership Programme and the creation of a new central Leadership  Development Centre.
The Royal Canadian Mounted Police’s (RCMP) senior executive committee  regularly uses the agency’s succession planning and management programs  when making decisions to develop, place, and promote its top 500-600  employees, both officers and civilians.  RCMP’s executive committee,  consisting of the agency’s chief executive, the chief human capital officer,  and six other top officials, meets quarterly to discuss the organization’s  succession needs and to make the specific decisions concerning individual  staff necessary to address those needs.  In 2001-2002, this process resulted  in 72 promotions and 220 lateral transfers.
Top leaders also demonstrate support by ensuring that their agency’s or  government’s succession planning and management initiatives receive  sufficient funding and staff resources necessary to operate effectively and  are maintained over time.  Such commitment is critical since these  initiatives can be expensive because of the emphasis they place on  participant development.  For example, a senior human capital manager  told us that the Chief Executive of the Family Court of Australia (FCA)  pledged to earmark funds when he established a multiyear succession  planning and management program in 2002 despite predictions of possible  budget cuts facing FCA.  Although human capital training and development  programs are sometimes among the first programs to be cut back during  periods of retrenchment, FCA’s Chief Executive has repeatedly stated to  both internal and external stakeholders that this will not happen.
Similarly, at Statistics Canada—the Canadian federal government’s central  statistics agency—the Chief Statistician of Canada has set aside a  percentage, in this case over 3 percent, of the total agency budget to  training and development, thus making resources available for the  operation of the agency’s four leadership and management development  programs.  According to a human capital official, this strong support has  enabled the level of funding to remain fairly consistent over the past 10  years.  Finally, the government of New Zealand has committed  NZ$19.6 million (about U.S.$11.2 million in July 2003) over four years,  representing both central government and agency contributions, for the  implementation of its new governmentwide senior leadership and  management development strategy.
section_title: Link to Strategic Planning
paragraphs: Leading organizations use succession planning and management as a  strategic planning tool that focuses on current and future needs and  develops pools of high-potential staff in order to meet the organization’s  mission over the long term.  That is, succession planning and management  is used to help the organization become what it needs to be, rather than  simply to recreate the existing organization.  We have previously reported  on the importance of linking succession planning and management with the  forward-looking process of strategic and program planning.In Canada,  succession planning and management initiatives focus on long-term goals,  are closely integrated with their strategic plans, and provide a broader  perspective.
For example, at Statistics Canada, committees composed of line and senior  managers and human capital specialists consider the human capital  required to achieve its strategic goals and objectives.  During the 2001  strategic planning process, the agency’s planning committees received  projections showing that a majority of the senior executives then in place  would retire by 2010, and the number of qualified assistant directors in the  executive development pool was insufficient to replace them.  In response,  the agency increased the size of the pool and introduced a development  program of training, rotation, and mentoring to expedite the development  of those already in the pool.  According to a Statistics Canada human  capital official, these actions, linked with the agency’s strategic planning  process, have helped to ensure that an adequate number of assistant  directors will be sufficiently prepared to succeed departing senior  executives.
In Ontario, succession planning and management has been a required  component of the government’s human capital planning framework since  1997.  OPS requires that the head of each ministry develop a succession  plan that (1) anticipates the ministry’s needs over the next couple of years,  (2) establishes a process to identify a pool of high-potential senior  managers, and (3) links the selection of possible successors to both  ministry and governmentwide opportunities and business plans.  These  plans, which are updated annually at the deputy ministers retreat, form the  basis for Ontario’s governmentwide succession planning and management  process.  While OPS has not conducted a formal evaluation of the impact of  this process, a senior human capital official told us that succession  planning and management has received a much greater level of attention  from top leadership and now plays a critical role in OPS’ broader planning  and staffing efforts.
For RCMP, succession planning and management is an integral part of the  agency’s multiyear human capital plan and directly supports its strategic  needs, and it also uses this process to provide top leadership with an  agencywide perspective.  RCMP is responsible for a wide range of police  functions on the federal, provincial, and local levels, such as illegal drug  and border enforcement, international peacekeeping services, and road  and highway safety.  In addition, RCMP provides services in 10 provinces  and three territories covering an area larger than the United States.  Its  succession planning and management system provides the RCMP  Commissioner and his executive committee with an organizationwide  picture of current and developing leadership capacity across the  organization’s many functional and geographic lines.
To achieve this, RCMP constructed a “succession room”—a dedicated  room with a graphic representation of current and potential job positions  for the organization’s top 500-600 employees covering its walls—where the  Commissioner and his top executives meet at least four times a year to  discuss succession planning and management for the entire organization.  For each of RCMP’s executive and senior manager-level positions in  headquarters and the regions, the incumbent and one or more potential  successors are depicted on individual movable cards that display relevant  background information (see fig. 1).  An electronic database provides  access to more detailed information for each incumbent and potential  successors, including skills, training, and past job experience that the  executive committee considers when deciding on assignments and  transfers.  In addition, high-potential individuals as well as employees  currently on developmental assignments outside RCMP are displayed.
According to a senior human capital official, because the succession room  actually surrounds the RCMP’s top leadership with an accessible depiction  of their complex and wide-ranging organization, it provides a powerful tool  to help them take a broader, organizationwide approach to staffing and  management decisions.
section_title: Identify Talent from Multiple Organizational Levels, Early in Careers, or with Critical Skills
paragraphs: Effective succession planning and management initiatives identify high- performing employees from multiple levels in the organization and still  early in their careers.  In addition, leading organizations use succession  planning and management to identify and develop knowledge and skills  that are critical in the workplace.
RCMP has three separate development programs that identify and develop  high-potential employees at several organizational levels.  For example,  beginning at entry level, the Full Potential Program reaches as far down as  the front-line constable and identifies and develops individuals, both  civilians and officers, who demonstrate the potential to take on a future  management role.  For more experienced staff, RCMP’s Officer Candidate  Development Program identifies and prepares individuals for increased  leadership and managerial responsibilities and to successfully compete for  admission to the officer candidate pool.  Finally, RCMP’s Senior Executive  Development Process helps to identify successors for the organization’s  senior executive corps by selecting and developing promising officers for  potential promotion to the senior executive levels.
The United Kingdom’s Fast Stream program targets high-potential  individuals early in their civil service careers as well as recent college  graduates.  The program places participants in a series of jobs designed to  provide experiences such as developing policy, supporting ministers, and  managing people and projects—each of which is linked to strengthening  specific competencies required for admission to the Senior Civil Service.  According to a senior program official, program participants are typically  promoted quickly, attaining mid-level management in an average of  3.5 years, and the Senior Civil Service in about 7 years after that.
Other agencies use their succession planning and management initiatives  to identify and develop successors for employees with critical knowledge  and skills.  For example, Transport Canada estimated that 69 percent of its  safety and security regulatory employees, including inspectors, are eligible  for retirement by 2008.  Faced with the urgent need to capture and pass on  the inspectors’ expertise, judgment, and insights before they retire, the  agency embarked on a major knowledge management initiative in 1999 as  part of its succession planning and management activities.  To identify the  inspectors whose leaving would most severely affect the agency’s ability to  carry out its mandate, Transport Canada used criteria that assessed  whether the inspectors (1) possessed highly specialized knowledge, skills,  or expertise, (2) held one-of-a-kind positions, (3) were regarded as the “go- to” people in critical situations, and/or (4) held vital corporate memory.
Next, inspectors were asked to pass on their knowledge through  mentoring, coaching, and on-the-job training.  To assist this knowledge  transfer effort, Transport Canada encouraged these inspectors to use  human capital flexibilities including preretirement transitional leave, which  allows employees to substantially reduce their workweek without reducing  pension and benefits payments.  The Treasury Board of Canada Secretariat,  a federal central management agency, found that besides providing easy  access to highly specialized knowledge, this initiative ensures a smooth  transition of knowledge from incumbents to successors.
section_title: Emphasize Developmental Assignments in Addition to Formal Training
paragraphs: Leading succession planning and management initiatives emphasize  developmental or “stretch” assignments for high-potential employees in  addition to formal training.  These developmental assignments place staff  in new roles or unfamiliar job environments in order to strengthen skills  and competencies and broaden their experience.  In the United States,  training and development opportunities—including developmental  assignments—must be offered fairly, consistent with merit system  principles.  However, according to a 1999 survey of career SES in the  United States, 67 percent reported that they had never changed jobs by  going to a different component within their agency or department.  Moreover, 91 percent said that they never served in more than one  department or agency during their entire executive careers. Agencies in  other countries use developmental assignments, accompanied by more  formal training components and other support mechanisms, to help ensure  that individuals are capable of performing when promoted.
Participants in RCMP’s Full Potential Program must complete at least two  6- to 12-month developmental assignments intended to enhance specific  competencies identified in their personalized development plans.  These  assignments provide participants with the opportunity to learn new skills  and apply existing skills in different situations and experience an increased  level of authority, responsibility, and accountability.  For example, a civilian  from technical operations and a police officer were given a 1-year  assignment to create balanced scorecards that are linked to RCMP’s goals.  Another program assignment involved placing a line officer, previously in  charge of a single RCMP unit, in the position of acting district commander  responsible for the command of multiple units during a period of resource  and financial constraint.  To reinforce the learning that comes from the  developmental assignments, participants attend a 6-week educational  program provided by Canada’s Centre for Management and Development  that covers the personal, interpersonal, managerial, and organizational  dimensions of leadership.  Each participant also benefits from the support  and professional expertise of a senior-level mentor.  Staff who complete  this program will be required to continue their formal development as  RCMP officer candidates.
In Canada’s Accelerated Executive Development Program (AEXDP),  developmental assignments form the cornerstone of efforts to prepare  senior executives for top leadership roles in the public service.  Canada  created AEXDP in 1997 to strategically manage the development of senior  executives who have the potential to become assistant deputy ministers  within 2 to 6 years.  AEXDP prepares individuals for these senior  leadership positions through the support of coaches and mentors, formal  learning events, and placements in a series of challenging developmental  assignments.  These stretch assignments help enhance executive  competencies by having participants perform work in areas that are  unfamiliar or challenging to them in any of a large number of agencies  throughout the Canadian Public Service.  For example, a participant with a  background in policy could develop his or her managerial competencies  through an assignment to manage a direct service delivery program in a  different agency.  Central to the benefit of such assignments is that they  provide staff with the opportunity to practice new skills in a real-time  setting.  Further, each assignment lasts approximately 2 years, which  allows time for participants to maximize their learning experience while  providing agencies with sufficient opportunity to gain a real benefit from  the participants’ contributions.
AEXDP reinforces the learning provided by the developmental assignments  with activities such as “action learning groups” where small groups of five  or six program participants meet periodically to collectively reflect on and  address actual work situations or challenges facing individual participants.  A senior official involved in the program told us that the developmental  placements help participants obtain in-depth experience in how other  organizations make decisions and solve problems, while simultaneously  developing a governmentwide network of contacts that they can call on for  expertise and advice in the future.
One challenge sometimes encountered with developmental assignments in  general is that executives and managers resist letting their high-potential  staff leave their current positions to move to another organization.  Agencies in other countries have developed several approaches to respond  to this challenge.  For example, once individuals are accepted into Canada’s  AEXDP, they are employees of, and paid by, the Public Service  Commission, a central agency.  Officials affiliated with AEXDP told us that  not having to pay participants’ salaries makes executives more willing to  allow talented staff to leave for developmental assignments and it fosters a  governmentwide, rather than an agency-specific, culture among the  AEXDP participants.
In New Zealand, a senior official at the State Services Commission, the  central agency responsible for ensuring that agencies develop public  service leadership capability, told us that the Commission has  recommended legislation that would require that agency chief executives  work in partnership with the State Services Commissioner to find ways to  release talented people for external developmental assignments.  In  addition, the government has appropriated NZ$600,000 (about U.S.$344,000  in July 2003) over the next 4 years to help the Commissioner assist agency  chief executives who might like to release an individual for a  developmental assignment but are inhibited from doing so because of  financial constraints, including those associated with finding a  replacement.
section_title: Address Specific Human Capital Challenges
paragraphs: Leading organizations stay alert to human capital challenges and respond  accordingly.  Government agencies around the world, including in the  United States, are facing challenges in the demographic makeup and  diversity of their senior executives.  Agencies in other countries use  succession planning and management to achieve a more diverse  workforce, maintain their leadership capacity as their senior executives  retire, and increase the retention of high-potential staff.
Achieve a More Diverse Workforce.  Leading organizations recognize  that diversity can be an organizational strength that contributes to  achieving results.  Our work has shown that U.S. federal agencies will need  to enhance their efforts to improve diversity as the SES turns over. In  addition, OPM has identified an increase in workforce diversity, including  in mission critical occupations and leadership roles, as one of its human  capital management goals for implementing the President’s Management  Agenda.  Both the United Kingdom and Canada use succession planning  and management systems to address the challenge of increasing the  diversity of their senior executive corps.
For example, the United Kingdom’s Cabinet Office created Pathways, a  2-year program that identifies and develops senior managers from ethnic  minorities who have the potential to reach the Senior Civil Service within  3 to 5 years.  This program is intended to achieve a governmentwide goal to  double the representation of ethnic minorities in the Senior Civil Service  from 1.6 percent in 1998 to 3.2 percent by 2005.  Pathways provides  executive coaching, skills training, and the chance for participants to  demonstrate their potential and talent through a variety of developmental  activities such as projects and short-term work placements.  A Cabinet  Office official told us that the program is actively marketed through a series  of nationwide informational meetings held in locations with large ethnic  minority populations.  In addition, program information is sent to  government agency chief executives and human capital directors, and the  top 600 senior executives across the civil service, and executives are  encouraged to supplement the self-nominating process by nominating  potential candidates.  This official noted that although the first Pathways  class will not graduate until November 2003, 2 out of the 20 participants  have already been promoted to the Senior Civil Service.
Rather than a specific program, Canada uses AEXDP, an essential  component of their succession planning and management process for  senior executives, as a tool to help achieve a governmentwide diversity  target.  For example, the government has set a goal that by 2003, certain  minorities will represent 20 percent of participants in all management  development programs.  After conducting a survey of minorities, who  showed a considerable level of interest in the program, officials from  AEXDP devoted 1 year’s recruitment efforts to identify and select qualified  minorities.  The program reported that, in the three prior AEXDP classes,  such minorities represented 4.5 percent of the total number of participants;  however, by March 2002, AEXDP achieved the goal of 20 percent minority  participation.  In addition, an independent evaluation by an outside  consulting firm found that the percentage of these minorities participating  in AEXDP is more than three times the percentage in the general senior  executive population.
Maintain Leadership Capacity.  Both at home and abroad, a large  percentage of senior executives will be eligible to retire over the next  several years.  In the United States, for example, the federal government  faces an estimated loss of more than half of the career SES by October  2007.Other countries that face the same demographic trend use  succession planning and management to maintain leadership capacity in  anticipation of the turnover of their senior executive corps due to expected  retirements.  Canada is using AEXDP to address impending retirements of  assistant deputy ministers—one of the most senior executive-level  positions in its civil service.  As of February 2003, for example, 76 percent  of this group are over 50, and approximately 75 percent are eligible to retire  between now and 2008.  A recent independent evaluation of AEXDP by an  outside consulting firm found the program to be successful and concluded  that AEXDP participants are promoted in greater numbers than, and at a  significantly accelerated rate over, their nonprogram counterparts.  Specifically, of the participants who joined the program at the entry level,  39 percent had been promoted one level and another 7 percent had been  promoted two levels within 1 year compared to only 9 percent and 1  percent for nonparticipants during the same period.  This evaluation  further concluded that AEXDP is a “valuable source” of available senior  executives and a “very important source of well-trained, future assistant  deputy ministers.”
Increase Retention of High-Potential Staff.  Canada’s Office of the  Auditor General (OAG) uses succession planning and management to  provide an incentive for high-potential employees to stay with the  organization and thus preserve future leadership capacity.  Specifically,  OAG identified increased retention rates of talented employees as one of  the goals of the succession planning and management program it  established in 2000.  According to a senior human capital official, OAG  provided high-potential employees with comprehensive developmental  opportunities in order to raise the “exit price” that a competing employer  would need to offer to lure a high-potential employee away.  The official  told us that an individual, who might otherwise have been willing to leave  OAG for a salary increase of CN$5,000, might now require CN$10,000 or  more, in consideration of the developmental opportunities offered by the  agency.  Over the program’s first 18 months, annualized turnover in OAG’s  high-potential pool was 6.3 percent compared to 10.5 percent officewide.
This official told us that the retention of members of this high-potential  pool was key to OAG’s efforts to develop future leaders.
section_title: Facilitate Broader Transformation Efforts
paragraphs: Effective succession planning and management initiatives provide a  potentially powerful tool for fostering broader governmentwide or  agencywide transformation by selecting and developing leaders and  managers who support and champion change.  Our work has shown the  critical importance of having top leaders and managers committed to, and  personally involved in, implementing management reforms if those reforms  are to succeed. Agencies in the United Kingdom and Australia promoted  the implementation of broader transformation efforts by using their  succession planning and management systems to support new ways of  doing business.
In 1999, the United Kingdom launched a wide-ranging reform program  known as Modernising Government, which focused on improving the  quality, coordination, and accessibility of the services government offered  to its citizens.  Beginning in 2000, the United Kingdom’s Cabinet Office  started on a process that continues today of restructuring the content of its  leadership and management development programs to reflect this new  emphasis on service delivery.  For example, the Top Management  Programme supports senior executives in developing behaviors and skills  for effective and responsive service delivery, and provides the opportunity  to discuss and receive expert guidance in topics, tools, and issues  associated with the delivery and reform agenda.  These programs typically  focus on specific areas that have traditionally not been emphasized for  executives such as partnerships with the private sector and risk  assessment and management.  A senior Cabinet Office official responsible  for executive development told us that mastering such skills is key to an  executive’s ability to deliver the results intended in the government’s  agenda.
The United Kingdom’s Department of Health has embarked on a major  reform effort involving a 10-year plan to modernize the National Health  Service by, among other things, devolving power from the government to  the local health services that perform well for their patients, and breaking  down occupational boundaries to give staff greater flexibility to provide  care.  A National Health Service official told us that the service recognizes  the key contribution that succession planning and management programs  can have and, therefore, selects and places executives who will champion  its reform and healthcare service delivery improvement efforts.  For  example, the Service’s National Primary Care Development Team created a  leadership development program specifically tailored for clinicians with  the expectation that they will, in turn, champion new clinical approaches  and help manage the professional and organizational change taking place  within the health service.
At the FCA, preparing future leaders who could help the organization  successfully adapt to recent changes in how it delivers services is one of  the objectives of the agency’s Leadership, Excellence, Achievement,  Progression program, established in 2002.  Specifically, over the last few  years FCA has placed an increased emphasis on the needs of external  stakeholders.  This new emphasis is reflected in the leadership capabilities  FCA uses when selecting and developing program participants.  For  example, one of these capabilities, “nurturing internal and external  relationships,” emphasizes the importance of taking all stakeholders into  account when making decisions, in contrast to the FCA’s traditional  internally focused culture.  In addition, according to a senior human capital  manager, individuals selected to participate in the FCA’s leadership  development program are expected to function as “national drivers of  change within the Court.”  To this end, the program provides participants  with a combination of developmental assignments and formal training  opportunities that place an emphasis on areas such as project and people  management, leadership, and effective change management.
section_title: Concluding Observations
paragraphs: As governmental agencies around the world anticipate the need for leaders  and other key employees with the necessary competencies to successfully meet the complex challenges of the 21st century, they are choosing  succession planning and management initiatives that go beyond simply  replacing individuals in order to recreate the existing organization, to  initiatives that strategically position the organization for the future.  Collectively, the experiences of agencies in Australia, Canada, New  Zealand, and the United Kingdom demonstrate how governments are using  succession planning and management initiatives that receive the active  support of top leadership, link to strategic planning, identify talent  throughout the organization, emphasize developmental assignments in  addition to formal training, address specific human capital challenges, and  facilitate broader transformation efforts.  Taken together, these practices  give agencies a potentially powerful set of tools with which to strategically  manage their most important asset—their human capital.
While there is no one right way for organizations to manage the succession  of their leaders and other key employees, the experiences of agencies in  these four countries provide insights into how other governments are  adopting succession practices that protect and enhance organizational  capacity.  While governments’ and agencies’ initiatives reflect their  individual organizational structures, cultures, and priorities, these  practices can guide executive branch agencies in the United States as they  develop their own succession planning and management initiatives in order  to ensure that federal agencies have the human capital capacity necessary  to achieve their organizational goals and effectively deliver results now and  in the future.
section_title: Agency Comments
paragraphs: We provided drafts of the relevant sections of this report to cognizant  officials from the central agency responsible for human capital issues,  individual agencies, and the national audit office for each of the countries  we reviewed as well as subject matter experts in the United States.  They  generally agreed with the contents of this report.  We made technical  clarifications where appropriate.  Because we did not evaluate the policies  or operations of any U.S. federal agency in this report, we did not seek  comments from any U.S. agency.  However, because of OPM’s role in  providing guidance and assistance to federal agencies on succession  planning and leadership development, we provided a draft of this report to  the Director of OPM for her information.
As agreed with your offices, unless you publicly announce its contents  earlier, we plan no further distribution of this report for 30 days from the  date of this letter.  At that time, we will provide copies of this report to  other interested congressional committees, the directors of OPM and the  Office of Management and Budget, and the foreign government officials  contacted for this report.  In addition, we will make copies available to  others upon request and the report will be available at no charge on the  GAO Web site at www.gao.gov.
If you have any questions concerning this report, please contact me or  Lisa Shames on (202) 512-6806 or at mihmj@gao.gov and shamesl@gao.gov.  The major contributors to this report were Peter J. Del Toro and Rebecka L. Derr.
section_title: Objective, Scope, and Methodology
paragraphs: To meet our objective to identify how agencies in other countries are  adopting a more strategic approach to managing the succession of senior  executives and others with critical skills, we selected Australia, Canada,  New Zealand, the United Kingdom, and the Canadian Province of Ontario  based on our earlier work where we examined their implementation of  results-oriented management and human capital reforms. We reviewed the  public management and human capital literature and spoke with subject  matter experts to obtain additional context and analysis regarding  succession planning and management.  A key resource was the National  Academy of Public Administration’s work on the topic, including their  maturity model and subsequent revisions, which describe the major  succession planning process elements of initiatives that take a strategic  approach to building organizational capacity.
We identified the examples illustrating the practices through the results of  over 30 responses to a questionnaire sent to senior human capital officials  at selected agencies.  We analyzed written documentation including  reports, procedures, guidance, and other materials concerning succession  planning and management programs for agencies in these countries along  with government-sponsored evaluations of these programs when available.  We interviewed more than 50 government officials from Australia, Canada,  New Zealand, and the United Kingdom by telephone, or in person during a  visit to Ottawa, Canada.  To obtain a variety of perspectives, we spoke to  officials from the countries’ national audit offices, central management,  and human capital agencies.
The scope of our work did not include independent evaluation or  verification of the effectiveness of the succession planning and  management initiatives used in the four countries, including any  performance results that agencies attributed to specific practices or  aspects of their programs.  We also did not attempt to assess the prevalence  of the practices or challenges we cite either within or across countries.  Therefore, countries other than those cited for a particular practice may, or  may not, be engaged in the same practice.  Because of the multiple  jurisdictions covered in this report, we use the term “agency” generically to  refer to entities of the central government including departments,  ministries, and agencies, except when describing specific examples where  we use the term appropriate to that case.
We conducted our work from January through June 2003 in Washington,  D.C., and Ottawa, Canada, in accordance with generally accepted  government auditing standards.  We provided drafts of the relevant  sections of this report to officials from the central agencies responsible for  human capital issues, individual agencies, and the national audit office for  each of the countries we reviewed as well as subject matter experts in the  United States.  We also provided a draft of this report to the Director of  OPM for her information.
subsections: section_title: GAO’s Mission
paragraphs: The General Accounting Office, the audit, evaluation and investigative arm of  Congress, exists to support Congress in meeting its constitutional responsibilities  and to help improve the performance and accountability of the federal government  for the American people. GAO examines the use of public funds; evaluates federal  programs and policies; and provides analyses, recommendations, and other  assistance to help Congress make informed oversight, policy, and funding  decisions. GAO’s commitment to good government is reflected in its core values of  accountability, integrity, and reliability.
section_title: Obtaining Copies of GAO Reports and Testimony
paragraphs: The fastest and easiest way to obtain copies of GAO documents at no cost is  through the Internet. GAO’s Web site (www.gao.gov) contains abstracts and full- text files of current reports and testimony and an expanding archive of older  products. The Web site features a search engine to help you locate documents  using key words and phrases. You can print these documents in their entirety,  including charts and other graphics.
Each day, GAO issues a list of newly released reports, testimony, and  correspondence. GAO posts this list, known as “Today’s Reports,” on its Web site  daily. The list contains links to the full-text document files. To have GAO e-mail this  list to you every afternoon, go to www.gao.gov and select “Subscribe to  e-mail alerts” under the “Order GAO Products” heading.
subsections: section_title: Order by Mail or Phone
section_title: To Report Fraud, Waste, and Abuse in Federal Programs
section_title: Public Affairs