Succession Planning and Leadership Development – A Symbiotic Relationship
Barbara Irwin, President, HR Advisors Group
Michelle Bennett is the people manager in the Americas for GHD Inc., a global engineering, architecture, and environmental consulting
company. Ms. Bennett provides oversight and HR responsibility for the
1,100 GHD employees located in multiple offices throughout Canada, Chile, and the United States. She recently was a speaker at the National
Society of Professional Engineers (NSPE) Synergy Roundtable in
Alexandria, Virginia. HR Advisors Group caught up with her to have her share
some thoughts on succession planning and leadership development.
Can you give us your ‘big picture’ thoughts on succession planning and leadership development in the industry as the whole?
A large number of organizations today find that their senior
leadership is comprised of the baby boomer generation. Organizations
are beginning to see a real need to share knowledge, develop future
leaders and have succession planning in place prior to the exit of the
baby boomer generation from the workplace. In an effort to not only
identify future leaders and extract the knowledge of current leadership,
organizations must develop some type of integrated learning environment
that merges the leadership pipeline with current senior leaders.
Succession planning really depends on an organization’s personal
preferences. It can be as easy as an Excel spreadsheet that identifies
the leadership pipeline or as intensive as using occupational assessment
tools to evaluate who should be in your pipeline. It doesn’t have to be
complicated, but it’s critical to know who is in the pipeline, who is
transitioning out, who needs to be transitioned in and what are the best
ways to develop these individuals.
As far as leadership development, keep in mind that a good leadership
is a very individualistic skill. In our business, someone who has
strong technical skills or is great at business development might not be
good in leadership positions. Sometimes we put people in the wrong
positions because they have good “technical skills” but poor leadership
So what is leadership development? Is it external or internal
training programs? Executive coaching? One-on-one mentoring? The answer
is yes to all of those programmatic tactics because it’s not a one-size-fits-all approach. Again, this is where having good succession
planning in place is important. Take a look at your pipeline and
determine what leadership development training is needed for people
18–36 months out. For individuals with immediate leadership transition
needs, maybe it’s one-on-one mentoring or executive coaching. Make sure
to interview and involve the current leadership team and find out the
goals and objectives of individual roles and positions. This can allow
you to evaluate individuals in the pipeline and see who currently has
the competencies and who needs greater training or development.
With such a large swath of senior leaders falling into the baby
boomer generation, retirement on their minds in the next 5–10 years, are organizations prepared for or thinking about this?
Personally, I think this topic is on most HR professionals’ minds.
However, even though everybody sees it as important, we are lagging
behind on ramping people up to be the next emerging leaders or
identifying these leaders. It is understood that it’s a priority, but
overall, we lack having the necessary tools in place to do it. Typically
I find that the hardest part is having discussions with an
organization’s senior leadership asking them what their transition plans
are and ascertaining how we extract their knowledge before they leave.
Why is this so difficult?
These types of conversations are hard because often there is a lot of
legacy baggage within organizations. Most of those individuals are in
senior roles. You’re an HR Director approaching a CEO or COO and saying
‘when are you going to retire?’ It’s a challenging conversation to have
because sometimes people get defensive and think you’re pushing them
out. It’s great for senior leaders to take the initiative and tell us
‘this is my exit strategy over the next few years,’ but more often than
not they don’t. Often there isn’t a plan in place to extract all their
collective knowledge from 30 or 40 years of experience before they
leave. This is extremely valuable knowledge that can be shared for the
greater good of the organization.
Also, there can be controversy once an emerging leader is identified.
The question then becomes, ‘do we tell the person that they are an
emerging leader?” How do you begin to ramp someone up for the next
position when they may not know they have been identified as a potential
next leader? How do you push knowledge to the emerging leader? These
situations are driven by the culture of the organization and often it’s
up to HR to drive these conversations.
Read the complete interview here.
Preventing Fee Disputes
Engineering firms provide professional services within a competitive business context. A firm must be financially viable to allow its professionals to pursue their practice goals. Professional service fees do not normally provide a high profit margin, and firms are often strained for working capital. Therefore, it is extremely important for firms to avoid fee disputes in order to stay financially solvent. Furthermore, a demand for the payment of fees often results in an allegation that fees were not paid because the services were not approved by the client or were negligently performed. Engineers can minimize the possibility of fee disputes through good business practices.
Use a Client Evaluation Checklist
Before signing a contract, firms should exercise due diligence in evaluating the client and project. Businesses routinely check the financial strength and payment record of their business partners. Firms should ask similar questions, such as:
- How is the client organized and financed?
- Is the client undercapitalized, or set up as a limited liability company that will not exist after the project is complete?
- Who are the principals involved in the project?
- What are their business reputations?
- Are they financially secure and willing to risk their assets?
- What is their track record with other professionals on other projects?
- Is the project financially feasible?
- Are the scope, quality, schedule, and budget sound?
Answering these questions should inform the decision of whether to work with the client on the project. The responses will also provide insight into special provisions that the engineer should build into the contract to protect its fee.
Make the Professional Services Agreement Specific as to Scope and Clear
as to Compensation
The Engineers Joint Contract Documents Committee (EJCDC) standard form documents are excellent tools for establishing clear, sound contract provisions. When not using the industry consensus documents, make sure the negotiated contract addresses the following issues:
- The manner, method, and form in which fees will be paid, including a schedule of payment dates and an up-front “mobilization” payment, if appropriate.
- The right to suspend services until delayed payments are received and the right to terminate the contract and pursue legal remedies if the suspension is ineffective.
- The ability of the parties to enforce the contract without spending extensive time or money in doing so.
- The services to be provided, the manner and method in which they are to be delivered, and the time frame for their execution. It should not be assumed the client understands if a service is not listed that it will not be provided. The scope of services must be clear to avoid payment disputes.
- The specific responsibilities of the engineer and client, including how the parties will handle any questions or problems that might arise during design and construction. The questions could range from payment for changes in scope to government-mandated modifications, or from changed conditions requiring the alteration of the design to issues involving the client’s ability to complete the project.
Remember the Rules of Communication and Documentation
Clients risk the most on any project. They need to be aware of the progress of their project and understand the value that an engineer adds to the endeavor. Regular and prompt statements detailing the services provided (with appropriate references to contract clauses) should summarize the progress made since the last billing.
Involving the client in the design process also makes it easier to resolve problems and prevent arguments over fees. Most disputes arise, in part, when clients become angry over misunderstandings that could have been avoided through good communication. Disputes over fees often become a dissatisfied client’s final expression of discontent. However, the refusal to pay a fee—especially a final payment—may reflect an intentional strategy of fee avoidance or an evolution of a cost recovery scheme.
Think Carefully Before Escalating a Fee Dispute into Adjudication
Any form of adjudication signals the end of the cooperative working relationship with a client. It probably also signals the end of any opportunity to provide future services to that client. Always consider mediation. Nonbinding mediation affords both the client and professional a nonthreatening opportunity to find a third party to help resolve the dispute quickly and amicably. Before pursuing fees through adjudication, firms should also evaluate whether a judgment against the client is collectible. Firms should also be prepared for the possibility that the client will file a counterclaim alleging that services were performed negligently.
© 2013, Victor O. Schinnerer & Co. Inc. Statements concerning legal matters should be understood to be general observations based solely on our experience as risk consultants and may not be relied upon as legal advice, which we are not authorized to provide. All such matters should be reviewed with a qualified advisor. Victor O. Schinnerer & Co. Inc. is managing underwriter for the Schinnerer and CNA Professional Liability Insurance Program, commended by NSPE/PEPP since 1957.
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NSPE Legislative Affairs News
NSPE-PAC Participates in Event for Speaker of the
House John Boehner
NSPE's Government Relations Manager Arielle Eiser attended a political action committee event for Speaker of the House John Boehner. Other U.S. representatives present were David Valadao (CA-21), David Joyce (OH-14), Mike Coffman (CO-6), Scott Tipton (CO-3), Jeff Denham (CA-10), and Rodney Davis (IL-13). NSPE's top legislative issues were discussed, including professional liability and tort reform, energy policy, infrastructure, and the need to strengthen the American engineering workforce. This was an excellent opportunity to cultivate and strengthen relationships with important members of Congress.
Educating Tomorrow's Engineers Act Introduced
Senator Kirsten Gillibrand (D-NY), Congressman Paul Tonko (D-NY-20), and Congressman Joe Kennedy (D-MA-4) introduced the Educating Tomorrow's Engineers Act (S. 1178/H.R. 2426). This bill would integrate engineering education into the K–12 curriculum, provide instructors with tools and support to effectively teach engineering education, and promote research in engineering education. NSPE has sent a letter of support and is working closely with the sponsors to promote the bill and add new sponsors to this vital piece of legislation. NSPE has posted an Action Alert. Take action today!
NSPE Attends Congressional Briefing on the Role of Engineering in K–12 STEM Education
NSPE attended a congressional briefing cohosted by the National Science Foundation, ASME, and DISCOVER magazine entitled "Harnessing the Power of Engineering to Improve STEM Education in K–12 Schools". Speakers from the NSF, the Museum of Science, and the University of Maryland School of Engineering all spoke about the critical importance of emphasizing engineering in education as early as elementary school. Studies clearly show that earlier engineering education improves student achievement, problem-solving skills, and increases the number of students interested in pursuing careers in engineering.
For a complete list of NSPE legislative activities, visit NSPE's Issues and Advocacy page.
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NSPE Enters New Leg in its Race for Relevance
Under the leadership of President Dan Wittliff, P.E., F.NSPE, seven task forces, made up of 96 dedicated NSPE members from 41 states, were formed to address various aspects of the Society's operations. The work of the task forces—totaling about 3,000 hours—was coordinated by Vice President Harve Hnatiuk, P.E., F.NSPE, and Tim Austin, P.E., F.NSPE. Thanks to their efforts, these members have created a new foundation for a refocused NSPE.
To learn more about this initiative, visit the NSPE Web site.
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Recent Court Decisions of Relevance to Contract Documents
Hugh Anderson, EJCDC Legal Counsel
Some recent court case issues include:
- Risk allocation in design/build contract. Fluor Intercontinental v. Department of State, United States Civilian Board of Contract Appeals (2012).
Amount of interest owed to contractor, as prevailing party in claim for additional compensation. Redondo Construction Corporation v. Puerto Rico Highway and Transportation Authority, United States Court of Appeals for the First Circuit (2012).
- Commercial general liability coverage for contractor, when damage to the work was caused by a subcontractor. K & L Homes, Inc., v. American Family Mutual Insurance Co., Supreme Court of North Dakota (2013).
For a complete list of cases and summaries, visit the EJCDC Web Site. [ return to top ]