Fifty years. That’s how long it has been since Japanese manufacturers introduced the world to “just-in-time” production methods. Toyota is credited as the initial birthplace of this methodology, which is aimed primarily at reducing flow times within production systems as well as response times from suppliers and customers. A huge aspect of this process is understanding production schedules and timelines and making sure that inputs, resources and parts are supplied and readily available.

One of the many responsibilities for Boards of Directors is to hire and oversee the compensation and performance of the top executive within their organization. As well, Boards are responsible for establishing the organization’s long-term strategic direction. Embracing the “just-in-time” approach and applying it to human capital management will allow Boards to anticipate what executive skills and characteristics are needed, at each stage of their strategic plans.

Ideally, Boards should be mapping their executive succession planning activities to their strategic planning responsibilities to help ensure that they have the right leadership within their strategic evolution. Like just-in-time manufacturing, proper succession planning requires organizations to proactively understand what skills they will need and when they will be needed.

All succession planning should begin with a review of strategic plans to understand what leadership skills are required at each stage. Once Boards have clarity on what will be needed, they will then be able to properly establish an inventory of:

• What skills they have,
• What skills can be developed, and
• What skills should be acquired.

After Boards successfully implement a just-in-time mindset and map their succession responsibilities to their strategic planning responsibilities, they will have positioned their organizations for future success.

Global Governance Advisors (GGA) works solely for the board, in collaboration with senior management. GGA successfully provides expert, state of the art compensation and governance advice without apparent or perceived conflicts of interest. Our Executive Compensation consulting practice implements comprehensive reviews to ensure pay-for-performance linkage, successful succession planning, fulfillment of disclosure requirements and the optimum alignment of compensation to corporate strategy. We provide rigorous competitive assessments of pay levels for Chairman, Committee Chair, Committee Member and Board Director positions. These assessments include key financial metrics relative to peer groups in terms of retainer, meeting fees and equity compensation.