When I moved into Human Resources, one of my first tasks was to organize the Succession planning program for the Cruise Line I was working at. I was well familiar with performance assessment models and performance management tools, however the concept of Succession Planning was new to me. Today I am of the school of thought that an organization without a strong Succession Planning program is an organization without a plan for the future.
I have had the opportunity to work in a number of businesses that had so called Succession planning strategies or models, but when reviewed closely in reality, what they had was “Replacement planning” programs.
So what is the difference? From a very basic point of view; replacement planning is a strategy in which an organization has “Identified” either one or a number of potentially qualified candidates to take over a role of responsibility (Management or Senior Management) when the role becomes available. In reality there is not much “Planning” that goes into this practice, but more of a process of identifying good performers that are willing to take on the new role.
Succession Planning, on the other hand is a strategy in which an organization carefully identifies, reviews, develops and prepares a candidate within a specific time frame for a very specific role. In other words once the candidate or candidates are identified they are trained and groomed specifically for that role within a specified timeframe.
So what are the advantages of “Succession Planning”? Well, besides the obvious (Having candidates ready for future openings, without having to hire external talent) a properly designed and executed program also carries considerable value in the areas of organizational knowledge, business memory, employee motivation and substantial financial advantages.
Organizational Knowledge: An effective succession planning process is a process that could range from 12 to 24 months depending on the role the candidate is being groomed for. During this time a training plan, development plan and mentoring program would be implemented in which the candidate is developed against specific core competencies for the next role. Besides learning and developing skills for their next role the candidate is also gaining a brand new perspective on the organization which allow him to use his knowledge and experience that they currently have in their role and use this to apply to the new information they are receiving and in the process creating continuity of knowledge within the organization.
Business Memory: One of the most tragic effects that happens when senior talent (Management or executives) leave an organization is the “Memory loss” that occurs when the person leaves. In organizations where internal promotions and internal talent development is predominant, candidates at management and senior management levels have tremendous “Memory” value which they have accumulated over the many years in which they moved through and up the organization until the level they are today. When one of these employees leaves the organization all this memory leaves with them, in most cases never to return and in worst case scenarios setting the organization back in this area months or even years. I once worked in a large and high profile organization with over 15 years in business that almost went bankrupt due to the departure of a high number of management and executives around the same time period. After closely reviewing this event it became clear that the issue was not the loss of talent (As a matter of fact the company was able to bring in replacements for the management that left within a record time frame) but due to the loss of organizational memory.
An effective succession planning process could have and would have avoided this memory loss by having a solid pool of candidates ready and groomed for the roles that opened up.
Employee Motivation: Effective succession planning is by nature a very strong motivator, not only to the people within the program but also those considering long-term careers within the organization.
For those members within the program it establishes a very clear set of expectations and guidelines for them to develop their career to where they want it to go. They are being trained and coached for their next step within the business and in most cases they have mentors (Normally more senior members of the organization) constantly guiding them and helping them with valuable exposure and recognition for their efforts. In addition the best Succession planning programs even establish the timeframes in which the candidates will reach their next role, giving them a specific goal in which they will reach the next level.
For members of the organization not yet within the process but willing and waiting to go though it, it gives them a clear and transparent picture of the organizational values, expectation and culture and at the same time it provides clear expectations for the next steps in their career.
Financial Advantages: Even though there are additional costs in Succession planning programs, such as: Assessment tools, development plans, training costs, mentoring time, administration costs, etc These costs are significantly less than hiring external candidates for the new roles or than promoting a candidate that might not be ready or able to perform the new role. Some of these risks are: Loss of consumer confidence, loss of employee loyalty, demotivated workforce, cultural incompatibility, etc which in turn could result in incremental loss of business performance at all levels of the organization.
So what is an effective “Succession Planning” Strategy? Well, that depends on the organization, it’s values, culture, industry, goals and objectives and so on, however there are a series of basics that are required to have a good and effective succession planning process:
Transparency: Many attempts have been made to develop succession planning strategies that are so robust and sophisticated that they wind up being confusing or complicated to understand. This, in turn winds up in creating a degree of confusion around the process itself leading to loss of credibility or efficiency.
A good process needs to be robust, yet transparent and simple enough that even though designed for senior level roles only it could be easily viewed and understood at any level of the organization so that all members of it can develop trust and confidence not just about the process but also those that go through it and eventually end up leading their organization.
Consistency: Once a process has been developed and implemented it should remain consistent and unchanged with the exception of significant organizational changes that need to be adjusted in the process.
For example, if the process establishes eligibility criteria for senior executives stating that they must be with the organization at least 3 years before being able to participate in the program, this should remain this way as long as the program is in place. If the program changes arbitrarily each year it will wind up hurting the credibility of the program and in turn loosing it’s efficiency.
Time sensitiveness: This is most likely the most difficult part of any Succession plan process. To be effective the process must establish a reasonable time frame in which a candidate could expect to move into a role. With reasonable I mean within 6 months. If you extend this timeframe you might wind up with “Disenchanted” candidates since the timeframe becomes intangible (It is difficult for anyone to picture a career move 12 or 18 months out, it is to long).
I am of the opinion that an organization that invests time and effort in a strong and effective succession plan program and strategy is making a great investment in their future, their people and their prosperity, since they are investing in the continuity of their people, their culture and their identity and at the same time creating a people culture that reflects solid business practices and establishes trust in their employees.