Replace your Succession Plan with Succession ManagementMay 24th, 2014
Are you frustrated with the fact that despite all of the energy your company goes through on an annual basis to develop a succession plan, that very little ever comes from it? Well, despite the fact that the world has changed dramatically, the way most organizations approach succession has not. Organizations are experiencing, and will increasingly see, competition for critical talent segments. A number of forces have changed the way we look at preparing for our future workforce needs:
- Markets are no longer predictable. Changes in consumer tastes mean that it is now much more difficult to predict what will sell.
- Customer demands change much more rapidly as new products from a larger group of competitors come to market faster — no longer can a company predict with accuracy what it will bring to market 10 years from now.
- The supply of talent is no longer easily predictable.
- And there is significant pressure to show a financial return associated with every set of business practices.
This combination of trends creates the need to accelerate and broaden leadership development, develop different and more relevant leadership competencies, and create deeper, more targeted levels of bench strength to fill the succession pipeline.
Our current succession plans cannot deliver what they promise given this uncertainty, and yet they create a false sense of security in the organization; while simultaneously costing time and resources. However, talent planning is an important organizational process. Here are some strategies to consider that can help you improve the effectiveness of this effort:
Be Clear About the Goal of Succession Management
The goal of Succession Management should be to help the organization achieve its overall objectives. A Succession Plan is not an end in itself. That requires an approach to enable getting the right people with the right skills into the right jobs in a cost-effective way.
Unless you have the financial and management resources to look at the entire organization, it will be important to set specific goals for each Succession Planning cycle. Accomplishing only a few extremely strategic objectives is much more significant that doing a lot of things for a lot of people that don’t yield measurable business results.
Get the Hiring Piece Right
When the decision is made to go outside the organization to fill a position, hire for future as well as current fit. Evaluate your star performers to create a hiring profile with the mix of skills, knowledge, abilities and traits that can be used as a benchmark for screening candidates.
One of the most important criteria is how the employee will fit into the corporate culture. Hiring people whose skills and resume indicate they are a good fit, but have a different style and motives may be a poor fit with the culture. These people will rarely thrive.
There are many scientifically validated tools to help with this assessment. This process can be easily automated to make it fast and easy for everyone.
Business Leaders Must Be Actively Involved
Management impatience is the biggest roadblock to success in managing talent more effectively. Executive ability to focus attention and effort on initiatives is limited, especially if they do not see a clear connection between those initiatives and the overall goals they are pursuing.
Getting and keeping the attention of senior managers requires more than simply pointing out the crises that may happen if they do not take talent management seriously. They require a compelling explanation on how to do it better and how doing so will help the organization meet its goals.
That where HR comes in. HR should serve as facilitator of the process – ensuring nominating executives use selection criteria correctly, as well as point out potential disconnects between nominations and other performance or talent-related data.
Recognize that your Plan is a Living Document
Any talent plan is only as good as its connection to facilitating achievement of organizational strategy. As strategy often changes, so too should your talent plan to address emerging organizational requirements.
Hold Managers More Personally Responsible for Developing their People
There is no greater way to measure a manager than by whether the people working for him/her improve. Yet how many organizations have you seen that directly tie manager performance to the success of their people? If there is no incentive or accountability in the process, there will be difficulty ensuring all business unit leaders participate and follow through consistently across the company.
Identify the Talent Implications of Strategic Plans
A critical starting point for establishing Succession Planning goals is to look at the Strategic Plan. Will the company be entering new markets, launching new products, or creating strategic business partnerships over the next few years? If so, understanding the impact the strategy will have on talent readiness and availability is critical.
• What does the business need from your people and organization to win?
• What people and organizational outcomes must be achieved?
• What factors may impede achievement of our people priorities?
Segment your Talent
The succession pipeline should extend several layers below the executive level, but never lose focus on the future needs of the business. Succession activities must focus on critical roles, regardless of where in the organizational hierarchy they are found. Ask your leadership team key questions to identify the Pivotal roles in the company. When identifying pivotal roles, we are not referring to the “A” players or senior executives who command the highest salaries. Pivotal roles are those that, if left vacant for an extended period of time, will expose the business to serious risk. Pivotal roles are those where the difference in competitive success would be achieved by improving the quality or availability of that talent pool. Identifying this group of positions/people will enable the organization to focus its energy on strategically critical development and retention.
1. Which positions would cause the biggest financial impact if they became vacant, resulting in lost opportunities or other significant costs?
2. Which positions require specialty or unique expertise that can only be acquired through years of training and advanced education?
3. Which positions make decisions that have significant long-term financial impact?
4. Do future business needs (i.e. new strategies, markets, products, etc.) create a greater demand for the position than the company’s current supply?
Create Talent Pools
There are many times when it makes more sense to identify a “pool” of individuals to develop, rather than identifying specific successors to replace one leader. A talent pool focuses on developing a group of high-potential candidates for leadership jobs in general. Senior executives no longer need to worry about deciding who’s going to back up whom in their organization, except for the most senior positions. The task of completing an annual replacement plan is eliminated and more time is freed up to focus on the development of this group of individuals.
Develop the Tools and Systems to Ensure that Talent Pool Candidates are Accurately Identified
Roughly 93% of high-potential employees are high performers, while only 29% of high performers are high potentials . In other words, while almost all high potentials are currently high performers, most high performers are not high potentials. Organizations must improve their ability to make this distinction.
Often individuals are nominated by their superiors. Often they are selected because of their technical and sales skills as well as concern for their retention rather than for their proven potential to grow to higher levels. A small investment in better selection of candidates will produce a tremendous measurable return.
Identify Critical Experts
In addition to identifying high potential employees, it is also a good idea to identify employees who are critical to the business primarily because of a unique area of expertise that they provide. These individuals demonstrate competencies that are very complex – competencies that may take many years to develop. The follow-up actions for these individuals will probably be different than the actions initiated for high potential employees, but none the less valuable.
Review Low Performers
The talent review is an appropriate time to also identify and discuss low performers and low potentials, as well to develop an action plan to address the issue.
Some Last Words:
Business strategy has moved away from the assumption that we can plan our way around uncertainty, heading instead toward a model wherein the key competency is the ability to react and respond quickly to new opportunities. Succession management must move in the same direction if it is to support this new orientation in strategy. Effective Succession management is not an end in itself, but a means to an end. That end is to make money or to advance broader organizational objectives. The suggestions outlined here are a general way to think about reengineering succession planning. Individual employers must still make choices about the strategies they pursue to maximize value.
Looking for more on this topic? Check-out our elearning course “Succession Management for the 21st Century” and earn 3 Strategic HRCI credits.