Last Updated Oct 24, 2007 3:25 PM EDT
Succession planning is preparation for the future—understanding what the future demands of the market will be and preparing the people in your organization to meet them. Many organizations find it challenging enough to meet present demands, but, in terms of people development and organic growth, such planning is critical to your organization's future success.
To achieve future success, you will need three things: the ability to evaluate the business's strengths and weaknesses, an understanding of the talent in your organization, and—once you identify capable individuals—a plan for preparing them to take on increasingly challenging roles. Succession planning ensures that individuals develop the knowledge, talents, and skills required to replace key players in the organization as needs arise.
In fast-moving businesses, succession planning is very important. It creates pools of talent that are flexible enough to meet a broad range of future requirements. One of the biggest problems facing fast-moving companies is their shortage of the right people to meet the challenges of future growth. Talented people frequently become frustrated because their employer is short-sighted and task-focused. A succession plan helps to achieve a balance between short-term requirements and long-term organizational growth.
The succession planning process is essential to the future of the business and ensures a good return on your training investment. If it is ignored, gaps in capability could inhibit future success. However, succession planning need not be complicated or difficult. If it is incorporated into performance reviews, development planning, and strategic sessions, it will ease the burden on administration.
Even a small organization has to have goals to work toward, or it is in danger of becoming reactive and of hindering or, altogether ending, its growth. Always think of what the organization would do if one of its key employees left or was unable to work for an extended period of time. Are the resources and experience available to fill the gap?
It is important that you begin with a strategic review to be sure you and your team are fully aligned to the business's goals and objectives. The review should include information on the following:
- the external environment—what are the current market conditions?
- the internal environment—what does the business do well and what is it known for?
- the organization structure—how is business currently done?
- the resource requirements—what can the business afford to invest in?
Follow this with a business review to determine:
- the current state of the sales;
- current marketing investment;
- the operational efficiency;
- the financial controls.
These reviews will give decision-makers an idea of what they may have to change now in order to meet the needs of the future.
A business's most valuable resource is its people, and how this resource is used can make the difference between a business's success or failure in the future. Understanding the talent in your business, through a talent audit, is the key to future success. In exploring talent, you need to go beyond each person's performance in the role assigned to him or her and understand:
- Values—what beliefs guide each person's thinking and action? These significantly influence management styles and decision-making in the business. They determine whether or not things get done and how they get done. Values can block action when they do not reflect the values of others and of the organization, and can facilitate it when they do. An individual's values also affect the way he or she makes and sustains relationships both inside and outside the business. Looking at a person's relationships, past and present, can provide helpful insights into his or her values and motivations, as can a 360-degree survey.
- Untapped skills—what can people do that they have never before been asked to do? A number of processes are available that can help you to gauge this hidden capability. Psychometric testing is one. It uses deductive reasoning to measure aptitude. However, because it is largely based on past performance it is limited in its ability to predict future capabilities, other than to assume that it is possible to extrapolate future ability from current success. However, a number of methods (based on the work of Elliott Jaques) explore future thinking and action capability. The premise on which these are based is that there is a hierarchy of thinking, and people who can think at increasing levels of abstraction can take a long-term view in an uncertain and ambiguous future. Talent audits done through development centers, where direct observations can be made of people in realistic situations, can be particularly helpful.
The selection of those who should be included in the talent audit needs to be handled with sensitivity, as it sends a clear political message to all employees. Your criteria must be well-defined and should be published, so that no can claim that they have been excluded unfairly. Selection criteria for each person should include:
- good performance in key areas of the role
- motivation and enthusiasm for future career success
- sponsorship by a senior manager—not necessarily their current manager
- active interest in the selection process, and willingness to self-promote and commit to future growth
By creating different scenarios to test the strategic goals, you will learn, too, what experience and skills you will need for the business to succeed in the future. Scenario planning is usually done with the senior team, off-site, allowing them to prioritize future goals and understand what the implications of those goals will be on the business's resources. Some goals will clearly end up being unrealistic for financial or other reasons at this stage.
Once you have reviewed the talent in your business and tested your strategic goals against future scenarios, your business is in a position to develop your organization's talent and capability to meet these goals. The organization should be encouraged to think broadly and not focus on detailed skills. Skills learned today may not meet the requirements of tomorrow, so flexibility is essential to successful succession planning.
A good succession plan always includes a robust employee development plan that involves each individual, his or her manager, and the senior team. This ensures that development is both incorporated into current job roles and aligned to future business needs. Because coaching and mentoring will likely play an important role, senior managers need to commit time to these activities. Additionally, stretch assignments that have a future focus can be used effectively to develop talent, as can innovative and challenging activities, which can be highly engaging and motivating. The annual review of the development plan may be used to check on progress and to make adjustments, if necessary.
It may also become necessary for you to make adjustments within your talent pool—adding to it or refreshing it with new blood. People's motivations may change, the market may change significantly, and the needs of the business may evolve and change direction. Therefore, it is important to review the talent pool—probably best done annually, as well.
One of the key roles of HR in an organization is to ensure that the business has the human resources necessary to meet future needs. Therefore, your HR department's policies and procedures must reflect this. In a business (such as IT) that has a high turnover of skills and experience, it is essential that you integrate a mechanism for rewarding employees who are included in the succession plan so that they do not take their skills and experience elsewhere. However, the responsibility for ensuring that there is succession and development within the organization lies not only with HR, but with the entire business management team.
Organizations that put one person's name behind each existing role and call it succession planning, not only put extreme pressure on that individual to conform to the organization's plan for his or her career, but discourage others in the organization who may be equally qualified to fill the role. Talent feeds off other talent and some competition is healthy. By creating a talent pool that harbors the full range of skills and experience you will better serve the future needs of the business.
Many organizations do not plan for future needs and, as a result, fill only roles that suit the present. By making sure that succession planning and strategic planning take place alongside each other, a business can ensure that individuals are available to fill the roles necessary to meet future goals. Scenario planning can help to identify where the key roles lie, and where vulnerabilities exist.
Senior personnel often look for successors in their own image, and are, therefore, more personality- than capability-oriented in their selections—which may not be in the best interests of the business. It can be helpful to hire a consultant who can provide objective advice, based on analysis and a clear understanding of the challenges facing the organization. A succession planning process that includes a number of different areas of the business, can give a more holistic view and ensure that talent is developed and used in areas that best serve the business.
Collins, James C.
Rothwell, William J.
Succession planning software: www.successionwizard.com/?source=adwords