Over its more than 100 years as a growing, significant company in the recycling and retail steel industry, Pacific Steel and Recycling has developed a history of choosing and retaining top performers. This excellent retention rate is a tremendous benefit in most respects, except one. Its loyal middle- and upper-level managers, most of them part of the Baby Boom generation, are nearing retirement. In fact, 50% of upper level management will be retiring within the next five years, and 80% of the mid-range managers will be retiring in the next 10 years.
The Pacific Steel leadership team realized that the impending retirements posed a challenge and opportunity for the company.
- The challenge—who will lead the company when leadership retires?
- The opportunity—the chance to develop a clear path toward leadership that would prepare new generations of leadership and take advantage of the new growth potential on the horizon.
Ray Wahlert, president of Pacific Steel, turned to Price Associates for help in developing a succession management plan that would meet the company's looming leadership needs as well as pave the way for future growth.
Ron Price, president and CEO of Price Associates, saw great potential in the process, “We realized that it was important to bring together a task force of Pacific Steel management and work together to create a plan that was both workable and motivating. By pulling together a carefully selected team of eight managers and executives, there was greater possibility for true effectiveness, as well as buy-in from the top down.”
The Pacific Steel Executive team created a task force charter by defining their mission, key results, guidelines (values and structure) and resources. Four task force sessions followed in which the task force explored the key results identified by the executive team:
- Define what superior performance looks like in the leadership position.
- Develop a system for selecting candidates in a way that results in more predictable, superior performance.
- Create a way of measuring and managing superior performance.
- Establish a framework for training and developing superior performance in those moving toward leadership positions.
In just six months, the task force had a proposal ready to present to the executive team. They met with the executives for a lively discussion of the proposal, resulting in great dialogue, deeper understanding among all stakeholders and, with only minor changes, the proposal was approved and the plan put into action.
Price Associates continues to partner with Pacific Steel and Recycling to ensure their success in implementing the succession management and leadership development plan. Two significant projects are underway to fulfill the proposal: a team is currently working on a strategic compensation plan and system, and another team is developing the knowledge base and training processes for developing skilled, capable, entrepreneurial and professional leadership for the future. “We are delighted with the work the task force did,” explains Ron Price, “but what is most satisfying to our Price Associates team is that our work in one area with Pacific Steel has been catalytic in effecting change and growth on many levels throughout the company. This is the goal of any strategic, succession management plan.”