Succession Management : More Than Just a Plan

IDENTIFYING, DEVELOPING AND RETAINING  TALENT FOR CRITICAL ROLES IN THE FUTURE

The executive team at a North American manufacturing company sat quietly in the boardroom, wondering what the urgent meeting was all about. Team members soon found out: the company’s senior engineer was leaving immediately to work for a competitor. It was a signifcant blow, since he was directing the implementation of a new, critically important production process. His departure could mean disrupted assembly lines, insufcient inventory levels, and de- layed customer shipments.

Te frst order of business was crisis man- agement — including scrambling to fnd someone to take his place. Te second was coming up with a longer-range plan for suc- cession management, both to retain people in critical roles and to make sure successors are in place.

To avoid such nightmare scenarios, many organizations are taking action on succession management. Two simple steps can go a long way:

1. Connecting succession management and career development process.

The engineer who left had expressed an interest in moving into an executive leadership role on many occasions, but those discussions were never linked to the company’s succession-management plans. Ofering a clear development plan that aligned with his career aspirations might have kept him from making a leap to a competitor.

2. Rolling out succesion beyond the executive level.

Had the company’s succession plan extended to other levels and key roles in the company, a successor for this role would have been identifed and trained. In addition, employees from other departments with the necessary project management skills would have been identifed and ready to step in.

SUCCESSION PLANNING’S EVOLUTION

Succession planning has come of age over the past decade, driven by increased global competition, intense corporate governance requirements, and dramatic changes impacting workforce demographics and mobility.

Succession initiatives have evolved from narrow programs that only identify talent ready to fll top executive roles into compre- hensive management systems that forecast talent gaps, predict domino efects if one person leaves, and are linked to extensive development initiatives. Today’s dynamic succession management strategies align with broader talent management initiatives and extend deeper into the organization.

The critical business driver of succession management is talent continuity: motivating, developing and retaining employees to execute the company’s long-term growth plans. A comprehensive succession management strategy answers the following questions:

>> Do you have the right people with the right skills for today and tomorrow?

>> Do you have the bench strength to re- duce the risk of turnover in leadership or key positions?

>> Are you ofering the right development to prepare high-potential employees for greater responsibility?

>> Where are the skills and talent gaps in your workforce? Are you taking the right steps to address them?

>> Are you providing your people with di- verse cross-functional experiences and exposure to leaders across the company?

>> Can you fnd and compare your candi- date options quickly and easily when it’s time to promote?

Successful succession management must be comprehensive and integrated with your talent strategy. When you get it right, you can reduce your risk of sudden, unexpected turnover, because your due diligence allowed you to improve your talent insight, agility, mobility and retention.

Broadening participation in succession management shows your employees that they have a future in your organization, a path to get there, and a reason to stay with you and give you their best.

Employees know what’s in it for them, and they value the ability to take charge of their own careers.

WHY SUCCESSION MANAGEMENT NOW?

The world of work is changing, and no organization can assume that essential talent will always be available. Tere are many reasons for this change, including:

1. Demographic Shifts: In many countries, leadership and skills gaps present an ever-growing challenge as the post-war generation moves into retirement. Younger generations either lack the sheer numbers or the necessary skills to fill the void. And in many emerging markets, the large number of ambitious young workers is offset by gaps in knowledge and skills, as well as the lack of middle and senior management to lead them.

2. Skills shortages and mismatches : In spite of high levels of unemployment worldwide, many positions go unflled. Around the world, graduating students ofen lack the skills and work experience to compete for today’s highly specialized roles. 

3. The rise of globalism : You’re no lon- ger competing with the company down the street for talent but with companies worldwide that scour the globe for talent. Workers no longer need to be on the same continent to collaborate with colleagues.

4. Lack of engagment in workforce : Your top performers aren’t the only ones with options. Thirty- one percent of surveyed employees report they’re not satisfied with their jobs. Assume that your employees are keeping their LinkedIn profiles up to date, that they’re checking out the job boards, and that they’re always on the lookout for their next opportunity.

5. Changing the nature of work : Traditional ideas about “full-time employment” have been obliterated over the past decade. If you haven’t already, expect to see more contract and contingent labor, flex schedules, job sharing, retirees working part time, and other work arrangements that were unthinkable not that long ago. Further challenging the notion of “traditional careers” are the Generation X and Millennial populations, who carry high expectations for new and challenging work assignments.

KEY ELEMENTS

A successful program needs to be ongoing and dynamic, and must be linked to development and other talent initiatives. It’s a complex process that requires technology to manage.Your managers must build development and mentoring into their everyday work. This requires setting goals, establishing regular check-ins, and evaluating progress. Both the organization and the employee must be involved, and everyone must be aware that things change — including strategy and business conditions. Both the process and the people involved must be fexible enough to adapt.

Your organization can reduce its risk by involving more people in the process (talent pooling). Can’t-miss high-potentials sometimes fizzle. Someone who nearly washes out one year can later become a top performer. Casting a wider net reduces the risk and builds the unforeseen into the process. Meanwhile, employees need the freedom to investigate chances to grow internally and to opt into a career path.

Here are key elements to succession planning:

1. Career develpoment plans identify the ambitions and goals of your employees. Ideally, helping employees make progress toward their career goals will help to retain them. But career planning is also important in grooming identifed successors to make sure they’re ready to step into their next role, if necessary. And identifed successors should be closely in- volved in the analysis of existing production processes and alternative solutions.

2. Other talent initiatives provide important information when it comes to succession planning. For example, knowing the common qualifcations and competencies of each role — knowledge, behavior and skills is essential for identifying and developing successors. How does succession connect to other aspects of talent management?

>> Career development provides potential successors with development today to prepare them for the future.

>> Performance management provides in- sight into who your top performers are.

>> Learning addresses gaps in employees’ knowledge and skills.

>> Recruiting identifes a common set of competencies needed to recognize and hire the right candidates by seamlessly looking at both internal and external candidates to fnd the best fit.

3. Succession-management tech-nology allows you to get away from spreadsheets and have the application do the heavy lifing for you. Features include:

>> Predictive modeling: Use “what-if ” scenarios to predict what may happen when employees leave or transition to another role. You can also simulate the domino efect of what happens when your succession plan is put into action.

>> Decision support: Because all employee information is integrated into a single system and you have comprehensive talent profles, you can make complete side-by-side comparisons when it’s time to make important decisions.

>> Calibration: It helps you to easily identify top performers and ensure objective, accurate ratings of talent across groups and departments. Because top performers are estimated to be up to three times more productive than other employees, identifying those employees will give you a huge boost toward achieving your business goals.

>> Charts: Dynamic, easy-to-read organizational charts provide visual summaries that show existing and potential leadership gaps. These help identify your bench strength and provide a dynamic view into a wealth of knowledge about your employees. You can quickly assess employee risk of loss and impact of loss, zero in on critical roles, and see whether a successor has been identifed.

>>  Reporting: By extending succession planning throughout the company, managers can get constant access to up- to-date information about employees who are succession candidates, including snapshots of an employee’s back- ground, expertise, performance, and career aspirations.

CONCLUSION

When it comes to retention, leadership matters: 62 percent of surveyed employees who plan to stay with their current organizations report high levels of trust in corporate leadership. A succession management program tied to development can give your organization the opportunity to exhibit leadership, earn trust, and engage your employees. You can also avoid disasters with succession management. Your company can get the right people in place, because you’re using predictive modeling and accessing calibrated performance data when making talent decisions. No more surprises, just preparation.

—Excerpted from a 10-page SuccessFactors whitepaper titled “Identifying, Developing and Retaining Talent for Critical Roles.For more info: www.successfactors.com

 

 

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