Introduction
Many organizations define “succession” as the grooming of a small number of replacements for top executives, typically with one replacement per position. An executive director of a not-for-profit, with the help of the board of directors, would choose a successor, and be comfortable with a one-to-one mapping of talent and position. But it is much more than that, especially when we consider the importance of planning for the future continuity of an organization.
In a nutshell, succession management is the development of a pool of talent with the skills, attributes, and experiences to fill specific, often high-level positions. Organizations start with a thorough assessment and planning process to forecast business and leadership needs of the future. In this way, they identify the type of talent they will need for the organization of tomorrow.
The Realities of Today’s Talent Pool
Reality #1 – Unfortunately, these high-level or key positions are occurring at the same time as there are statistically fewer people to fill the jobs. “Over the next 15 years, there will be a 15% decline in the number of 35- to 44-year-olds,” explains Tom Saporito, senior vice president, RHR International in Chicago. “This means there will be fewer people available for the top management slots and high-performance executive talent will be in demand.”
Reality #2 – Widespread retirements of the baby boom generation are also appearing at a time when the demand for executives is actually on the increase because of ongoing economic growth.
Reality #3 – Furthermore, there are no significant countervailing trends on the horizon. As a report by McKinsey and Company explains, women are no longer surging into the workforce. White-collar productivity improvements have flattened, immigration levels are stable, and executives, at this point, are not prolonging their careers.
Reality #4 – Sadly, younger or newer managers who are available and eager for more responsibility are not, in many cases, prepared to take on that responsibility. This is because downsizing caused many organizations to eliminate the middle managers who were the traditional source of executive talent, leaving younger managers without mentors.
Reality #5 – Hiring external candidates is not only costly, but studies conducted by the Center for Creative Leadership reveal that a staggering 66% of senior managers hired from the outside usually fail within the first 18 months.
The reality, then, is to start planning and preparing for the future now, before retirements, terminations, or unexpected illnesses create a staffing crisis.
Where do we start?
A simple starting point for the identification of succession needs is an organization chart that includes key staff and their expected retirement dates.
Succession management also requires a clear view of the organization’s unique and specific information. Such items include:
- positions that may need to be filled,
- job and industry specific competencies/descriptions,
- expected timeframe,
- assessment of internal talent and identification of gaps,
- creation of high potentials or talent pool through a variety of methods,
- development plans,
- ability to track and retain the talent pool,
- support for succession candidates,
- sourcing external candidates if necessary.
Process:
Research shows that many of the successful succession plans have certain elements in common. The plans that truly work include many of the following strategic actions and processes. These plans:
- Receive visible support from the CEO and top management.
- Identify key leadership criteria. It is essential that an organization understands what skills and competencies it requires to succeed. No one group, including a human resources department, can identify all of these traits. As a result, successful organizations usually rely on focus groups and task forces to better understand core competencies.
- Find future leaders and motivate them. This can involve any of several approaches, including 360-degree feedback, profiles, performance reviews, and informal discussions. Understanding employees’ talents, aptitudes, and interests – and then providing interesting assignments that stretch and challenge – creates a much higher likelihood of success than a strict compensation-reward system.
- Are simple and tailored to unique organizational needs.
- Create a sense of responsibility within the organization. Many successful organizations rely on corporate management and HR to review and oversee the progress of employees. Then, as an employees move up the ladder, there is a detailed record of his or her progress, with reviews from various levels within the organization.
- Incorporate employee input.
- Align succession planning to reinforce the corporate culture. It is essential to retain a focus on core values.
- Emphasize accountability and follow-up.
Measurement:
In measuring the effectiveness of a succession planning program, the following four Critical Success Factors have been identified as integral to success:
- The process anticipates the complexities of future business needs. The process must confirm the ability of potential leaders to deal with the complexities of future business and ethical challenges.
- The process focuses primarily on leadership development. Organizations need to be strong in their executive development, through incorporating a variety of methods including mentoring, training and development, and assessment tools.
- The process is treated as one of the organizational priorities. While important, ensuring the future leadership of the organization is only one of the business priorities. This means setting executive accountabilities for succession planning, mentorship, and development activities that are realistic.
- The process is so practical that it actually gets used in making senior staffing decisions. Keep things simple without losing quality. This means making wise choices about the tools and processes you will use to translate leadership potential into reality.
Summary:
In today’s regularly changing business environment, where we see high turnover and less employee loyalty, it is critical for an organization to plan for its future. The bottom line is that identifying and retaining talent is the KEY to the continued growth of any organization. Jack Welch was often quoted as saying he spent at least half his time as CEO developing people. It “took”.
Large or small, for-profit or not-for-profit, an effective succession planning and management process can be designed to fit a unique culture and keep it simple enough for seamless continuity.
Source: “Five Keys to Successful Succession Planning”, by Samuel Greengard, Workforce.com
Source: “The Looming Leadership Crisis”, by Shari Caudron, Workforce.com
Source: A review of succession planning literature included in Succession Planning by Lorrina J. Eastman. (Published by the Center for Creative Leadership, Greensboro, North Carolina.)
Teresa Howe, CHRP, is an independent HR consultant and writer. As an HR executive with 15 years of generalist experience, she has contributed to several successful organizations being recognized as Canada’s Top 100 Employers and created meaningful change. As a long-standing member of the HRPAO, she also serves as president of the Board of Directors for Jobstart, a not-for-profit organization, speaks at conferences and creates workshops on HR related issues. Teresa can be reached at tandthowe@yahoo.ca.
