Succession Planning and Management
10 Mar 2015
For business owners, senior leaders, and boards of directors around the globe, succession planning is a concept that never ceases to be a topic of conversation due to the level of risk it creates for an organization. The biggest challenge with succession planning is the ability to truly execute on the plan with the objective of building a bench to ensure you have people ready to take on vacant roles when you need them. We need to change our perspective and stop focusing on just creating the plan and start focusing on the execution of our plan.
Succession management is core to many key elements of strategic talent management like identifying your talent gaps, creating a people strategy plan and even attracting the right talent for your business.
Many of us have heard about succession planning, but to break it down more, succession planning is basically identifying people within the organization to take over specific roles in a company as necessary to fill vacancies. In a perfect world we are all bubbling over in talent and have plenty of highly skilled agile people with the ability to step in to several different jobs at any point in time. In reality, it takes a concentrated effort to develop people over time through multiple assignments, special projects and mentors to get them ready to take on the type of roles we track in succession planning. This is why we need to start thinking about succession management as an on-going activity to help us meet our succession plan objectives. This management process is different in that it defines the actual process of executing the plan to ensure we have people ready when we need them. But, what do we need to include?
Elements of a Succession Plan for Business
Why do we need a succession plan?
One of the key factors is to reduce risk. Think about some of your strategic and core roles (identified by your talent gaps in a prior blog and radio show) where you want to ensure you always place your best people (AKA Top Talent!) in your most important jobs. These are the jobs that present the most risk and provide the most value back to the business. Research shows that when these key roles are empty it costs you approximately $7,000 a day until they are filled. If we multiply that by the two months on average it takes to fill these positions, your company could be saying goodbye to ~$300,000.00.Tip: this is a key deliverable from your People Strategy Plan. If it does not already exist be sure to include it in your plan.
What does it mean to build a deep bench?
Your bench consists of all of the people you have waiting in line for a position in your succession plan. Building the bench or filling the talent pipeline is the most important activity related to succession planning. You definitely should be including your high performers and high potentials on this bench as well as other key people with potential to perform any of these roles.
Unfortunately, creating a succession plan is where many typically stop. True succession management requires that you evaluate your succession plan throughout the year and follow it up with targeted development for every person identified on the plan. Hold the person who is currently filling that role accountable to support this development. Bench movement will be slow at best if we don’t take direct action to drive change and grow talent. Some companies even choose to keep their succession plan confidential. I would caution against this. If you keep it confidential you could lose your key people to another company that tells them from the beginning “I want to develop you into a future leader or individual contributor for our company.” Let people know they are recognized and valued. It’s in your own best interest.
What is True Succession Management?
When we talk about succession management, we are referring specifically to the actions taken to sustain and develop you succession plan. Here is a simple example: I’m tracking a job, let’s say a finance manager position has been identified as a core role because of their contributions to the company. I’ve identified 2 up and coming financial analysts who are high potentials and have the ability to take on this role in the future. When I refer to management it’s the activities we must execute in order to ensure they are ready when we need them by equipping them with development opportunities along the way.
To execute your succession management successfully, you need to consider a few key elements.
Create an employee inventory
Do you clearly understand their current skills and experiences? Many of us track education and certifications but not the details about what their natural abilities are.
Do they like analyzing data, customer interactions, paying attention to detail, fixing problems… We also need to understand their interests and values, so we know how they are motivated and how they are going to best move along this path we have lined out for them.
Create a targeted development plan.
It is important to identify where are your identified employees currently are on the bench? Are they 2 years out before being ready to take on this role? What type of new experiences do they need to be successful? Consider, what targeted development activities they need to be assigned in order to fast track their movement. This will help you ensure that someone is always ready and they will feel challenged as well.
The ripple in the pond from internal personnel advances.
Internal movement causes ripples across your organization. I recommend that you challenge your leaders to support their own internal movement by developing two people to take their role in the future. This limits managers stifling their employee’s movement because they are threatened about their own future. Don’t be afraid to identify and find talent externally as well. Look at people who could be brought in on a short notice and maintain the relationship with those individuals. Warning – it’s quicker and easier to hire from the outside. The failure rate of people coming in from the outside is much higher. It also has the potential to lower morale and employee satisfaction which is turn damages your culture. Many of the most successful companies develop their people internally. Its well worth the effort and time but must be planned.
For out next topic, The Importance of Career Planning I will help you define the value of career plans and how best to manage career pathing. You’ll be surprised to learn all the value added benefits career planning can provide to your organization and to your employees, especially the younger generation who are job hopping at a fast pace because many companies promise a structured career path but don’t deliver.