Succession planning refers to the plans, which a company formulates to fill its most important executive positions. In practice the process of succession planning involves a fairly complicated and integrated series of steps.
According to American Society for Training and Development, “Succession planning entails identification of employees who possess the skills to meet future organizational challenges”.
Learn about: 1. Introduction to Succession Planning 2. Definitions of Succession Planning 3. Concept 4. Scope 5. Need 6. Features 7. Importance 8. Elements 9. Principles 10. Model 11. Levels 12. Process and Steps 13. Advantages 14. Measures 15. Challenges 16. Organizational Issues 17. Hurdles 18. Suggestion.
Succession Planning: Definitions, Concept, Process, Steps, Scope, Importance, Features, Advantages and Hurdles
- Introduction to Succession Planning
- Definitions of Succession Planning
- Concept of Succession Planning
- Scope of Succession Planning
- Need for Succession Planning
- Features of Succession Planning
- Importance of Succession Planning
- Elements of Succession Planning
- Fundamental Principles of Successful Succession Planning
- A Succession Planning Model
- Levels of Succession Planning
- Process and Steps Involved in Succession Planning
- Advantages of Succession Planning
- Measures for Effective Succession Planning
- Challenges of Succession Planning
- Organizational Issues of Succession Planning
- Hurdles in Succession Planning
- Suggestions for Effective Succession Planning
Succession Planning – Introduction
The workforce in the organization does not remain stagnant. Change in personnel positions is a natural phenomenon. Succession planning is an ongoing system of selecting competent employees ready to move into key jobs in the organization, should these become vacant. Job-person matches are made between existing employees and future jobs they are likely to assume.
These future jobs are usually higher level positions. But, succession planning may be for key jobs above, at the same level, or even below the job an employee now holds.
Increasingly, succession planning is for lateral job moves (e.g., to a different function, department, project team, or territory).
A successful succession planning system needs to fulfill following criteria:
1. One, preferably two, well-qualified internal candidates are identified as ready to assume any key job as and when it becomes vacant.
2. A record of successful promotions (or other job placements) is prepared and referred to as and when require.
3. Few superior performers leave the organization because of “lack of opportunity.” Hence, a second line of defense has to keep ready.
Competency-based succession planning is little complicated. This system identifies the competency requirements for critical jobs, assess candidate competencies, and evaluate possible job person matches. Career path “progression maps” identify key “feeder” jobs for lateral or higher level “target” positions within a job family or across job families.
A competency-based succession planning system assesses how many employees in which feeder jobs have (or have the potential to develop) the competencies to perform well in key target jobs.
Organizational survival and growth are the most important responsibilities of top management of all the organizations. These responsibilities can best be fulfilled by succession planning, which ensures the availability of the right number and right kind of management staff at the right time and in the right positions for achieving continued organizational vitality and strength. These days the demand for effective managers is continuously increasing.
In addition to this, the future executives are expected to be more sophisticated for the purpose of developing and leading the new global initiatives. Thus careful planning for the subsequent replacement of managers at all levels in the organization has gained strategic importance. This is applicable to both small and large firms.
Succession planning is a process for identifying and developing internal people with the potential to fill key business leadership positions in the company. Succession planning increases the availability of experienced and capable employees that are prepared to assume these roles as they become available. There are many reasons why organizations need to think about succession planning. The most important reason is that we rely on staff to carry out our missions, provide services and meet our organizational goals.
Succession planning is a process whereby an organization ensures that employees are recruited and developed to fill each key role within the company. Through succession planning, organization recruits superior employees, develop knowledge, skill and abilities and prepare them for the advancement or promotion into ever more challenging roles.
Actively succession planning ensures that employees are constantly developed to fill each needed role. Thus succession planning is a means for an organization to ensure its continued effective performance through leadership continuity.
There are two ways of doing this:
i. The first is to compare the competencies of people in the feeder job with the competency requirements of the target job. Thus, the gaps are identified.
ii. The second is to compare the competency requirements of the feeder job and the target job.
Succession Planning – Definitions by Some Eminent Thinkers: Schein, Rothwell, Bill George and American Society for Training and Development
Succession planning refers to the plans, which a company formulates to fill its most important executive positions. In practice the process of succession planning involves a fairly complicated and integrated series of steps. For example, potential successors for top management might be routed through the top jobs at several key divisions as well as overseas.
So the most comprehensive definition of succession planning is that it is the process of ensuring a suitable supply of successors for current and future senior or key jobs arising from business strategy, so that the careers of individuals can be planned and managed to optimize the organization’s needs and the individuals’ aspirations. The real key in succession planning is to create a match between the organization’s future needs and the aspirations of individuals.
The only way to keep talented people is to provide them with growth opportunities that keep them stretching and finding more promising opportunities they might find elsewhere. Recruiting and retaining leaders becomes an economic and strategic challenge. Succession planning serves as an interface between the human resource function and the strategic direction of an organization.
In this role, it is a vital resource in anticipating the future needs of the organization and helps to find, assess, develop, and monitor the human capital required by the organization’s strategy.
According to Schein, “Succession planning and management can be defined as a purposeful and systematic effort made by an organization to ensure leadership continuity, retain and develop and knowledge and intellectual capital for the future, and encourage individual employee growth and development.”
According to Rothwell, “A succession planning process is most effective when it is a systematic effort that is deliberately planned and is driven by a written, organization wide statement of purpose and a policy.”
According to Bill George, “One of the most important things leaders do is to prepare for their own succession.”
According to American Society for Training and Development, “Succession planning entails identification of employees who possess the skills to meet future organizational challenges”.
Thus succession planning is a process of finding suitable people and preparing them to replace important executives in the organization, when these executives leave or retire. It is a type of planning where organization identifies internal employees as potential candidates for filling future vacancies that may arise within the organization and start training them well ahead of time to perform these roles.
Succession Planning – Concept
Succession planning is a process of determining critical roles within the company, identifying and assessing possible successors, and providing them with the appropriate skills and experience for present and future opportunities.
Succession planning is a process by which successors are identified for key positions throughout an organization including vital roles in each department of the organization.
It should take into account the strategic vision and objectives of the organization. With good succession planning in place, employees are ready for new leadership roles so when someone leaves the company, another is skilled and ready to step-up to that position.
Tom Bartridge observes in “Planning for Tomorrow” that Succession planning is nothing more than having a systematic process where managers identify, assess and develop their staff to make sure they are ready to assume key roles within the company.
A succession plan, simply put, is a component of good Human Resource planning and management. Succession planning acknowledges that staff will not be with an organization indefinitely and it provides a plan and process for addressing the changes that will occur when they leave.
Succession Planning – Scope
The scope of succession planning describes the extent of its application.
It can be determined from the following activities:
i. Identifying the Shortage of Leadership Skills and Stating the Requirements – Determines the requirements of key personnel at key positions in future. It also keeps a record of the leadership qualities of the present employees so that in future the shortage of such skills can be filled from within the organization.
ii. Identifying the Potential Successors for Critical Positions – Enables the organization to prepare for the future requirements for key personnel in advance. The organization has to find out the people with highest potential after accessing and defining the possible shortage of skills in future. The talented and competent employees having potentials to take more responsibilities are identified with the help of their past records and the feedback of their superiors.
iii. Coaching and Grooming the Stars – Involves preparing the identified potential successors to take greater responsibility and authority. The potential successors are trained through various development programs.
iv. Securing the Top Management Commitment and Support – Represents the most essential activity to ensure the success of the succession planning process. It requires securing the top management’s commitment towards the smooth functioning of the organization and getting full support from it.
Succession Planning – Need
Organizations exist as on-going concerns while personnel come in and go out on regular basis. Therefore, the continued existence of an organization over time requires a succession of personnel to key positions. These key position holders decide the prospect of the organization. If they are able and adopt right way of working, the organization may rise to a great height.
If they are not, the organization may touch rock bottom. Succession planning ensures that only right personnel fill the key organizational positions.
Succession planning ensures this in the following manner:
1. Through succession planning, an organization is able to identify the persons who are likely to fill up key positions in future. Because of availability of ample time, these personnel can be assessed meticulously to ascertain their suitability for the key posts.
2. Succession planning helps an organization to groom the successors for key posts so that there is high level of match between the role requirements and personnel abilities.
3. When succession planning is undertaken effectively and overall suitability of personnel is worked out on objective criteria, organizational personnel develop a feeling that the merit has a worth in the organization. This feeling ignites personnel to develop skills relevant for upward movement. They also remain more loyal to the organization which is a vital factor for organizational success.
Succession Planning – 7 Most Important Features
The most important features of succession planning that make us comprehend its basic characteristics and importance are as follows:
i. Involves three time frames, such as immediate (within one year), intermediate (one to five years), and long range (beyond 5 years) that decides the required duration for the preparation of a successor
ii. Ensures the growth prospects of an organization
iii. Represents a future-oriented activity
iv. Identifies the potential employees as replacement for key positions in the organization
v. Creates a healthy and harmonious environment within the organization
vi. Grooms the existing employees for future vacancies specially at the key positions
vii. Acts as a basic part of career planning
viii. Motivates the internal employees by ensuring promotion from within the organization.
Succession Planning – Importance
1. Succession Planning is a means of ensuring the organization is prepared with a plan to support service continuity when the executive director, senior managers or key people leave.
2. Succession Planning is a continuing supply of qualified, motivated people who are prepared to take over when current senior staff and other key employees leave the organization.
3. Succession Planning is an alignment between the organization’s vision and the human resources that demonstrates an understanding of the need to have appropriate staffing to achieve strategic plans.
4. Succession Planning is a commitment to develop career paths for employees who will facilitate the organization’s ability to recruit and retain top-performing employees.
5. Succession Planning is an external reputation as an employer that invests in its people and provides opportunities and support for advancement.
6. Succession Planning is a message to the employees that they are valuable.
7. The absence of a succession plan can undermine an organization’s effectiveness and its sustainability.
8. Without a succession planning process, an organization may not have means of ensuring that the programmes and services that are crucial to its operation are sustained beyond the tenure of the individual currently responsible for them.
9. Succession planning helps in nurturing and developing employees from within an organization. Employees who are perceived to have the skills, knowledge, qualities, experience and the desire can be groomed to move up to fill specific key positions.
10. Succession Planning ensures that there are qualified and motivated employees who are able to take over when the senior or other key people leave an organization.
11. Succession Planning also demonstrates to stakeholders such as clients, funders and employees that the organization is committed to and able to provide excellent programmes and services at all times, including during times of transition.
Succession Planning – 3 Main Elements: Positions for which Successors Required, Identification of Successors and Grooming of Successors
There are three main elements of succession planning:
1. Positions for which Successors Required:
The first element of succession planning is to determine the positions for which successors are required. The general practice in this context is that most organizations prepare succession plan for CEOs. Some organizations prepare succession plan for key positions which play strategic role in organizations. Sometimes these positions are separated from top management to be known as strategic management group.
2. Identification of Successors:
The second element of succession planning is the determination of likely successors for different positions that are likely to fall vacant in future. Depending on the organizational practices, such successors may be from the organization itself or from outside. However, succession from within provides opportunities to employees for progress in their career.
3. Grooming of Successors:
When successors are identified for key positions, attempts are made to groom them so that they are fully equipped to take the positions earmarked when these fall vacant. In the case of internal successors, this exercise begins much ahead of the likely vacancy. In the case of external successors, the grooming period is much shorter though the external successors are nominated much ahead of time of likely vacancy.
Succession Planning – 13 Fundamental Principles
1. The basis of succession planning is a strong HR management system which includes effective training, development and performance appraisal programmes.
2. Succession planning is about effectively re-filling a certain job position with an employee most suitable for the role; it is not about replacing a specific person.
3. The succession process should be carefully planned out and thoroughly implemented to ensure that the right employees are being prepared to fill the top positions in the years to come.
4. Succession planning is the responsibility of management, and it can be implemented only with the wholehearted support of top management.
5. It is a future-oriented process and the organization needs to identify what types of employees would be needed to fill future positions arising after 5 or 10 years.
6. Personnel policies should be updated from time to time in order to ensure that fair and equitable employment practices are adopted that allow the appointment of the most talented employees.
7. A systematic approach for identifying and selecting potential successors should be established so that unsuitable employees are not chosen for succeeding outgoing leaders.
8. Efforts should be continuously made to identify high performers and eligible employees through performance evaluation and potential appraisal.
9. The skills and knowledge that are required to serve in the top positions should be identified and these qualities should be cultivated in those employees who are being developed for succession.
10. The training and development needs of the potential successors should be determined and suitable programmes should be designed to hone their skills and competencies.
11. The top management should periodically review and monitor the candidate’s performance and progress.
12. Open communication should be encouraged between the management and the successors, and the successors should be provided feedback on their development.
13. The succession planning programme can be successful only if the successors are chosen keeping in mind the overall strategic goals of the organization.
Succession Planning – Model
1. Communicate Possible Opportunities:
i. Inform employees of the possible job opportunities that are anticipated over the designated time period (e.g., next three years).
ii. Communicate what key competencies are needed for those jobs. That is, what level of demonstrated skills and knowledge is management looking for in potential candidates for these jobs?
iii. Inform employees of the succession planning process that the organization intends to use (e.g., the steps in this model).
2. Identify who is Interested:
i. Open it up- Give employees the opportunity to indicate interest in possible job openings and willingness to participate in succession planning activities.
ii. Clarify that participation in succession planning is not a guarantee of advancement. However, participation could help one’s chances.
3. Assess Competency Readiness:
i. Assess individuals’ readiness to assume possible job openings for which they have indicated interest.
ii. That is, compare the employee’s present competency level to that required of the anticipated opening. Identify competencies that need development to help ready the employee for that job or occupation.
iii. It is advisable to use an assessment instrument that actively engages the employee as well as the supervisor in determining the employee’s competency levels.
4. Prepare Development Plans:
i. Together with the employee, prepare an individual development plan that outlines specific activities that the employee engage in to develop needed competencies. Include a timetable with milestones for assessing progress.
ii. The list of activities and timetable should be reflected in the employee’s EDPP.
iii. In addition to individual plans, it may make sense to have a group development plan applicable to core competencies for a particular occupation level that all interested employees should participate in.
iv. Consultation in preparing training plans and determining appropriate activities is available through the Department of Personnel’s Training and Development Services.
5. Provide Development Opportunities:
i. Help the employee follow through with the development plan by setting up training options and providing realistic time to participate in the training activities indicated in the employee’s development plan.
ii. The employee should also take personal responsibility to take the initiative and seek out activities that will help develop the targeted competencies. This display of initiative and follow through can show that the employee is serious about succession and may, in itself, be a key competency.
iii. Training options go well beyond the traditional classroom setting and do not have to be costly. Examples of development activities include: mentoring, job shadowing, task force participation, special projects/assignments, Internet and journal research, conferences, time-limited job rotations, video/audio tapes, committee participation, etc.
6. Formalize Eligibility:
i. For general service classified positions, employees typically must get on the appropriate job register to be formally eligible.
ii. Avenues to increase flexibility to formalize eligibility include:
iii. Use “until further notice” recruitment announcements so that employees can submit their application at any time
iv. Use desirable, not minimum qualifications
v. Streamline selection procedures – avoid using complicated multiple choice exams
vi. Use the “in-training” program that allows bringing the employee in at a lower level with automatic advancement to the higher level
vii. Use competency based classification structures
viii.Hiring procedures could be made flexible and established by a hiring agency.
Succession Planning – 5 Levels
No planning at all.
Simple replacement plan. Typically the organization has only considered what it will do if key individuals leave or become debilitated.
The company extends the replacement plan approach to consider lower-level positions, even including middle managers.
The company goes beyond the replacement plan approach to identify the competencies it will need in the future. Most often, this approach is managed along with a promote-from-within initiative.
In addition to promoting from within, the organization develops the capability to identify and recruit top talent externally. However, the primary source of successors should be from within, unless there are key gaps where the organization does not have key capabilities.
Dow chemical exemplifies some best practices for succession planning:
i. Dow has a comprehensive plan that addresses all levels within the organization, not just executive levels.
ii. CEO reviews the plan, signaling its importance.
iii. Managers regularly identify critical roles in the company and the competencies needed for success in those roles.
iv. Dow uses a nine-box grid for succession planning, plotting employees along the two dimensions of potential and performance.
v. High potential employees are recommended for training and development, such as Dow Academy or an MBA.
Interpublic Group, a communications and advertising agency, established a formal review process in 2005 in which the CEOs of each Interpublic business would talk with the CEO about the leaders in their organization. The discussions span the globe because half of the company’s employees work outside the United States.
A key part of the discussions was to meet with the individual employees to tell them about the opportunities available to them. “In the past, what I saw happen was that an employee would, want to leave and then all of a sudden they hear about all of the career opportunities available to them,” he says. “Now I want to make sure those discussions are happening before anyone talks about leaving,” said Timothy Sompolski, executive vice president and chief human resources officer at Interpublic Group.
The principles of strategic human resource management and high- performance work systems apply to non-profit enterprises as well as for- profit companies, and the benefits of good HR practices are just as rewarding. When it comes to succession planning, non-profits face a particularly difficult challenge of attracting workers to a field known for low pay and long hours.
Often, the people attracted to the enterprise are drawn by the cause rather than by their own aspirations for promotion. Thus, identifying and training employees for leadership positions is even more important. What’s more, the talent shortage for non-profits will be even more acute: A study by the Meyer Foundation and Compass Point Non-profit Service found that 75% of non-profit executive directors plan to leave their jobs by 2011.
Succession Planning – Process and Steps Involved: 6 Step Process
Succession planning is an important tool, which is used by all types of businesses whether large or small. It identifies areas where the business might be at risk for loosing key staff members, identify potential candidates internally to fill those positions and identify the need for training and development activities designed to close any gaps that may exist.
Following are the steps followed in the process of succession planning:
1. Identify Succession Needs:
Succession planning requires the ongoing consideration of areas of the company that may be at risk of losing key individuals. The first step in this process is identifying the key positions in the company that contribute most to ongoing success. While all positions are important but some are most critical than others. Critical position may be senior leadership positions, difficult to fill positions or new positions that may be required due to changes in the environment or the nature of the business.
More than just a casual exercise, this should be a formal planning session that involves senior leaders and human resources staff in companies that have HR departments. Clearly identifying areas at risk for succession due to attrition, retirement or new skills needs is an important step for companies.
2. Identifying Skills and Competencies:
In this step the key skills and competencies that the organization will need are considered. This is because for identifying positions that may become vacant businesses need to look at the types of skills gap that may exist when employee leave or retire or when new business requirement emerge.
3. Identifying Internal Positions:
One of key benefits of succession planning is providing opportunity for internal growth and development. By matching skills needs with the availability of potential internal candidates, companies not only limit their risk, but also provide important opportunities for the employees. Identifying potential internal talent can occur interactively, managers can ask employees to self-identify, indicating areas of interest they would like to develop.
4. Identifying Succession Management Strategies:
Now that critical positions have been identified and have been profiled for competencies, the next step is to choose from a menu of several human resource strategies, including developing internal talent pools, on boarding and recruitment to address succession planning.
5. Document and Implement Succession Plans:
Once strategies have been identified, the next step is to document the strategies in an action plan. The succession planning action plan provides a mechanism for clearly defining timeliness roles and responsibilities.
6. Evaluate Effectiveness:
To ensure that the department or agency’s succession planning efforts are successful, it is important to systematically monitor workforce data, evaluate activities and make necessary adjustments.
Steps in Succession Planning:
1. Company has to undertake a SWOT Analysis, preferably conducted by Top Managers.
2. Based on above, a mission statement has to be formulated.
3. From the mission statement, goals and objectives have to be fixed.
4. The objectives have to be classified as long and short term objectives giving each element its due importance.
5. Based on Company objectives, objectives of functional departments have to be framed.
6. Individual objectives and career Development Programmes have to be finalised so as to infuse motivation amongst individuals.
Career planning and succession planning are similar but not synonymous. Career planning covers all levels of employees whereas succession planning is generally required for higher level executives. Generally, career planning is based on a succession plan for the higher level executives. A Succession plan involves identification of vacancies that are likely to occur in the higher levels and locating the probable successors. Succession planning motivates employees and facilitates continuity of the organisation.
Succession Planning – 10 Major Advantages
1. Succession planning helps the organization to minimise risks and survive challenging events arising in case of unforeseen departure of the key leader.
2. It ensures availability of well trained, experienced and capable employees who can readily fill key positions when the need arises.
3. Investing efforts and time in developing existing employees motivates them and creates a greater sense of belonging to the organization.
4. Internal promotion policies ensure better employee morale and encourage employees to continually improve their performance.
5. Filling of key positions internally is more beneficial and less risky than hiring an outsider for a top position.
6. There is retention of superior employees within the organization by providing them opportunities for professional growth and progress.
7. Employees promoted through succession planning are more committed towards the organizational goals as they are aware that their personal success is integrated with the success of the company.
8. It enables the organization to quickly stabilize its operations should the top position fall vacant unexpectedly due to any unforeseen event such as death or disability of the position holder.
9. Regular training and development programmes for the employees in order to prepare them for future roles results in a superior quality of workforce which can easily handle more responsibilities.
10. A company which is committed to succession planning has a well-defined recruitment and selection policy which helps the company to select the best among the available pool of candidates.
Succession Planning – 7 Measures for Effective Succession Planning: Suggested by Hertig and Hammer
Since succession planning is essential for every large organization but obstacles generate due to faulty organizational practices, some measures are needed to make succession planning effective.
Hertig and Hammer have suggested the following measures to make succession planning effective:
Measure # 1. Involvement of Supervisory Board:
There is a need for active involvement of the supervisory board or any other high-level group of functionaries in succession planning. It should treat succession as a continuous, systematic process and may set up a committee specifically to formulate long-term strategies for the recruitment, evaluation, development, retention, and dismissal of senior executives.
Measure # 2. Driven by the CEO:
It is better that the chief executive takes direct personal interest in succession planning. He must make sure that suitable processes, structures, and management mechanisms are in place to provide for and support an effective succession planning.
Measure # 3. Procedural Consistency:
Companies having successful succession planning do not treat succession as a seasonal problem that only rears its head at infrequent intervals but treat it as a continuous strategic and evolutionary process that is quite independent of the company’s current situation. The basic aim of this process is to provide an objective, forward-looking, and strategically relevant basis for corporate decision making.
Measure # 4. External Benchmarking:
For making the succession planning successful, there is a need for evaluating the overall suitability of the possible successors against benchmarked skill requirements. The benchmarking should be external rather than internal.
Measure # 5. Pool of Successors:
There should be building of pool of successors who are aspiring top positions in the organization. To manage an executive cadre of this kind, it is important that the underperformers are excluded, and this rule should apply to family members too.
Measure # 6. Objectivity:
Organizations having successful succession planning are paragons of objectivity. They realize at an early stage that it is not necessary that an effective successor is available from the within. Therefore, scope for finding good successors should be widened.
Measure # 7. Application of Emotional Intelligence:
Emotional intelligence involves managing one’s emotions in making decisions so that these are not affected by the emotions. This is true for finding successors too. Time should be spent discussing the expectations, suitability, and needs of all those involved in the executive succession process, thereby eliminating all possibility of disputes in advance.
By developing an open, inclusive culture of communication, it is possible to defuse disputes and misunderstandings that are likely to arise in succession.
Succession Planning – 6 Major Challenges Faced in Succession Planning
Paul C Reilly, Chairman of Korn/Ferry International, the global executive search firm and provider of leadership development solutions, believes that globally most companies are poor in their succession planning. Though in management case literature most authors frequently quote the example of organizations like GE who have mastered the art, majority of the industry captains are still in dilemma how to manage succession planning.
Some of the challenges in succession planning are as follows:
1. Even though corporations want to give their managers broad experiences by moving them in the career ladder in the organization, they restrain themselves in doing so by preferring to join a new organization with a better offer.
2. Many companies had also been reported to suffer for taking out a member from a managerial team for his/her promotion. Although the individual selected for promotion gains, on the other hand the team without that key person suffers, as most of the time organizations do not have the right replacement.
3. The size of the corporation also matters a lot. The smaller the organization, the easier it is to ensure effective leadership development and succession planning. Further high growth rate for organizations also makes it difficult for the management to cater succession planning.
4. Many companies have geometric training which might not help the real cause of succession planning
5. Many companies assess the top 300-400 people and put them in the right teams and help them develop leadership. If every company nurtured the top 10-15% of the managers to build future leaders, it is half the job done. Organizations must keep a regular check up on the people turnover and every manager must be given the task of retention.
6. Succession planning in family run businesses is difficult and the major decisions with respect to the top management and the organization depend on the chairman or managing director positions, which are occupied by the family head.
Succession Planning – Organizational Issues of Succession Planning
The issues that indicate a need for competency-based succession planning systems are discussed here:
1. Promotion or placement outcomes are poor; too many people promoted or irrational transfers to new responsibilities result into failure to discharge responsibilities successfully or to quit.
Typical examples are promoting the best technical professional to supervisor or the best salesperson to sales manager and then noticing the lack of essential interpersonal understanding and skills.
2. In downsizing organizations, the key placement question may be which managers have kept up with their technical and professional competencies so they are able to return to individual contributor roles. “Lean and mean” organizations offer fewer vertical promotional or career path opportunities, with the result that more succession planning is lateral.
3. In the times of rapidly changing situations organizations require employees with different competencies. Globalizing firms need employees with the competencies to function in different parts of the world. Stagnant firms need employees with innovative and entrepreneurial competencies to survive in markets with shorter product life cycles and fast moving foreign competitors.
Downsizing firms need to decide who stays and who is to let go, that is, which employees have the competencies to fill demanding “same amount of work with fewer people” jobs in the new, smaller organization.
4. Mergers, acquisitions and reorganizations require the surviving firm to decide which existing employees are needed and who can adapt in the new structure. Mergers of similar firms often result in an organization with two marketing departments, two sales forces, and duplicate staffs in many functions. Merger efficiencies come from elimination of the double headcount. As with downsizing organizations, the question of who stays and who goes is determined on the basis of capacity and capabilities of employees.
Succession Planning – 9 Hurdles for Succession Planning
1. Lack of sufficient talent and skills in the existing staff.
2. A narrow approach because outside talent is not considered.
3. Ineffective HR practices which are not conducive to successful implementation of succession planning.
4. Biasness/favouritism towards certain employees by top management.
5. Inability to retain key employees and unplanned departure during plan implementation.
6. Wrong choice of potential successors.
7. Ambiguous definition of career paths.
8. Lack of top management interest in succession planning.
9. Succession plans may become outdated with time if not reviewed regularly.
Succession planning is an important component of strategic HR planning. Certain challenges may crop up in the way of successful implementation of succession planning, but there are a number of strategies that can be adopted to manage these.
If there is a lack of suitable talent at a particular level, the organization may consider looking further down the organizational hierarchy for potential leaders. First, good HR practices should be adopted so that the organization culture supports succession planning. Emphasis should be laid on motivating the talented employees with financial and non- financial incentives so as to retain them.
The potential successors should be chosen strictly on the basis of their individual merit; favouritism in the selection process should be avoided. The top management should engage itself in the periodic review of the succession plan and the progress of the candidates to ensure that things are proceeding according to plans.
It is very necessary to align the succession plan with the future HR requirements of the organization in the light of changing market environment. If implemented properly, succession plan facilitates the long-term sustenance and development of the organization by creating a pool of loyal and dedicated workforce who can readily take on added responsibility as and when needed.
Along with career planning, many organizations undertake the exercise of succession planning. Succession refers to coming into another’s place or position fallen vacant or likely to fall vacant in near future. Succession planning, as an organizational practice, is comparatively new technique but it has been in practice in princely States since long in which an heir used to be nominated and efforts used to be made to groom him to take the place of the king.
The same concept of succession is applied in today’s organization but with a slight difference. In the princely States, the heir used to be from the family itself but the organizations have a freedom to take persons from outside also.
Further, in the princely States, there used to be only one successor to take the place of the king whereas organizations prepare succession plan to fill key organizational positions including that of the chief executive officer (CEO) through succession planning.
Succession Planning – 10 Important Suggestions for Effective Succession Planning
Succession planning identifies internal employees who will step into a leadership role if a vacancy occurs. If done correctly, succession planning ensures that employees are developed and the organization will not suffer if a key employee/leader leaves the organization.
So following are some of the suggestions for effective succession planning:
Suggestion # 1. Moving from Succession Planning to Succession Development:
Plans do not develop anyone. Only the experiences of development develop people. It is seen that companies put more effort and attention into planning process than they do into the development process. Succession planning process have lots of to do’s – forms, charts, meetings, due dates and checklists. These sometimes create the false sense that the planning process is an end in itself rather than the precursor to real development.
Suggestion # 2. Continuously Assess Potential Employee Turnover:
Succession planning should on continuous basis assess potential employee turnover. Succession planning along with regular and ongoing performance review process should assist in assessing potential turnover and for this purpose department heads are a good resource in helping to identify employees that may be planning to leave.
Suggestion # 3. Measure Outcomes not Process:
This change of measuring outcomes not process is important because executive pay attention to what gets measured and what gets rewarded. If leadership development is not enough of a priority for the company to establish goals and track progress against these goals, it will be difficult to make any succession planning process work. Further the outcomes will help guide future efforts and mid-course corrections.
Suggestion # 4. Develop an Integrated Approach to Strategic Management:
Organization with an integrated, rather than just in time approach to succession management experience higher retention rates, increased employee morale and an environment that stimulates innovation and organizational change. There are some positions in the organization that are more critical than others. A successful succession planning should place a high priority on planning for a smooth change in such positions.
Suggestion # 5. Keep it Simple:
It is often seen that companies add excessively complex assessment criteria to the successful planning process in an effort to improve the quality of the assessment. Some of these criteria are even complex for the behavioral scientists to assess, so how could it be understood by the average line manager. So it should be seen that if more sophisticated assessments are used at the time of development process than these should be administered by the competent coach.
Suggestion # 6. Written Succession Plan:
Knowledge transfer is a critical component of succession management. There should be written procedures in place to formalize the knowledge transfer. A meeting should be held with the departing staff to document job responsibilities.
Suggestion # 7. Support from Top Management and Talent Development:
Succession planning must have the support and backing of the company’s senior level management and the HR department. Further once a successor is identified and the conversation has taken place to ensure he is interested in such a promotion, the company should put a step by step plan in place to develop this individual.
Training, more responsibility, more autonomy, a broader understanding of the business are some potential areas to identify and create plan to address. Providing feedback and encouragement to potential successors is an important step in the succession planning process.
Suggestion # 8. Better Recruitment and Retention Practices:
The organization should design the better recruitment and retention practices as this will aid succession planning. Many organizations focus more on recruiting the new employees and less on orienting the person to the position and the ongoing development of employee. The organization should make sure that its pay levels are competitive with the market place for retaining its employees.
Suggestion # 9. Stay Realistic:
The succession plans are not promises, they are often communicated such to the employees and lead to the frustration, if they are not realistic. So organization should give the promise of succession only if there is a realistic chance of its happening.
Further those involved in the succession planning process should craft their communication message carefully to focus on why certain positions are considered to be key, the skills and requirements necessary for those positions, and the process to be used in finding successors.
Suggestion # 10. Identification of Suitable Candidates:
Identifying candidates is not just a matter of sitting down with an organization chart. It requires meetings and discussions with leaders and if possible a representative from human resources. This cross functional team identifies skill needed for a particular role and then identifies employee who have those competencies. Sometimes there is not a perfect match for each position, but this discussion will give an idea of what is needed, who is available and allows the organization to put a plan in place to bridge any gaps.