Here’s what companies and their HR leaders must know about effective succession management, including why it’s important and which business and HR functions should be involved.
The numbers may vary, but a myriad of studies show the same issues: Baby boomers are retiring at record rates, many of your workers are looking for new jobs and you’re going to have a shortfall of Generation X and millennial leaders who are ready to move up. Add to that the widespread skills gaps across a variety of industries, along with too few companies focusing on talent development strategies. The upshot? Your company can’t afford to put off succession planning for a “better” time.
“I view succession planning as being a process that really allows an organization to continuously recruit and make ready their [talent] pipeline,” said Michael McGowan, who leads the leadership and talent practice at BPI group, a global talent management consultancy. He includes potential leaders at various levels of the hierarchy, starting with the CEO. But in an ideal situation, a company has a succession planning strategy for roles across and down the organization chart. This will enable a company to fill roles in both the short and the long term, he said.
Toby Townrow, managing director of 10Eighty, an employee engagement firm and software vendor that works with SMBs across both white-collar and blue-collar industries, also has an expanded view of succession planning. “Succession planning is successfully encouraging talent and helping people grow and develop to effectively ensure organizational success.” It involves attracting, developing, recruiting and retaining individuals who the company considers valuable.
Daniel FeimanManaging director, Build It Backwards
Daniel Feiman, managing director of Build It Backwards, a leadership and management consultancy and training firm, also works primarily with SMBs. He said the organization’s attitude counts for a lot when it comes to effective succession planning. “Almost everything is scalable. It’s a matter of setting your priorities,” Feiman said. “You can either spend your life putting out fires and [saying], ‘We’ll get to making it better tomorrow.’ And tomorrow, of course, never comes. Or you can set the priority that you need to improve by X% per year, per month, per day, and [figure out] how to do that,” he said. “If we’re going to take 5% of our time and our budget and put it into training, let’s schedule that. And it gets done.”
The best way to create an effective succession planning strategy will vary from organization to organization according to factors such as size, goals, maturity of any succession or workforce planning programs that are already in place and the talent management software being used. That said, there are a few components that go into creating an effective succession planning strategy that can help you get you started.
1. Decide on key positions
It’s a truism to say that change is constant. But today, “exponential” is a better description, and knowing the types of talent required to learn new skills, deal with new technology and keep up with other shifts is paramount.
“What got you here won’t get you there,” McGowan said. He’s referring both to the idea that anyone you promote into a new type of position will need new skills to do their next job well and the idea that deciding on key roles depends on knowing where you want to take the company.
Once that is established, both HR and executive leadership should be involved in deciding on which roles will be tackled during succession planning. And as McGowan and others pointed out, what you consider “key” will have a lot to do with the extent to which you already have a succession planning strategy in place. However, starting with top leadership is a must.
Beth Miller, founder of leadership development and talent management firm Executive Velocity, typically works with SMBs. She said that, while “succession planning is building a leadership pipeline throughout the organization,” you need to “start with the CEO.”
McGowan, who works with large enterprises and SMBs across industries, also recommends starting with the CEO. He said that, ideally, a company “should have seven CEOs within the organization.”
From there, move on to other roles you’ve identified.
2. Map current talent capabilities and gaps
An important component of your company’s succession planning strategy is identifying current employees with the potential to fill the roles identified and determining their strengths and growth areas. Don’t just go with the obvious choices. Internal choices, in general, should be prioritized, since recruiting externally typically comes with higher costs and has morale ramifications. However, other considerations, such as a lack of current employees to fill future roles or a need for new diversity and inclusion efforts, are also important.
“You’re looking for highly motivated workers with potential — they’re curious for new experience, they have insight and are good at problem-solving, and have great communication skills,” Townrow said.
“The capacity to learn is critical,” Miller said. She added that SMBs cannot afford to take 90 days to onboard a new hire — external or internal — so looking for people who can learn and take the initiative is critical.
Some software vendors offer stand-alone succession planning software meant to help with succession planning. For example, SuccessFactors and Workday offer modules, although companies tend to use lower-tech management tools, according to experts.
One reason for this, according to Townrow, is that, unlike more traditional software, such as ERP or even a human capital management system that streamlines HR processes in the short term, succession planning is longer-term and “transformational” and so seemingly easier to put on the back burner “when there are fires to fight.”
McGowan pointed to the nine-box grid as an assessment tool that business and HR leaders can use — typically in their once- or twice-yearly succession planning meeting — which enables an evaluation of employees’ current and potential contribution to the company. It, too, is used to identify gaps.
The BASKET technique can be used as a succession planning tool, according to Feiman. It’s the model that evaluates what people in certain roles need in terms of behavior, attitude, skills, knowledge, expertise and talent, and how various employees align to these roles and what gaps they have.
The Belbin team roles theory is another tool that can be used to enable succession planning strategy, according to Townrow. It helps to identify employees’ strengths and weaknesses through the lens of nine clusters of work behaviors.
Yet another tool to consider is the 360-degree assessment, which takes multiple views of an employee — not just a manager’s. Proponents say this can help to create a more objective measure of an employee’s potential and of areas that need improvement.
3. Create a succession management plan and measure results
As part of identifying the right talent for a given role, experts say it’s critical to get input from employees. Finding out what their career goals are is a must, whether that comes from informal meetings with the manager and others or additionally via the learning and development software that is in place to help capture such information.
That information, along with all the other succession management assessments, can be used to create a plan. The range of such plans can vary wildly depending on, for example, whether the next role is machinist or CEO. In the former case, the employee might simply be primed for the next role, but in the latter case, the CEO-to-be will have taken on work that fills in gaps in experience, along with pertinent leadership training.
On a general note, Miller said that those being groomed for managerial and leadership positions can virtually always benefit from training in certain core competencies, such as emotional intelligence, giving hard feedback and coaching.
Simulations can also be helpful, according to Feiman. As an example, he pointed to the beer distribution game, an experiential simulation game that helps to illustrate key principles of supply chain management, such as the bullwhip effect.
Miller also recommended putting employees on cross-functional groups where they are charged with collaborating to develop a new product — a win-win for the company and the employees.
One key, according to Townrow, is to provide the development to employees so that they truly have a bridge from the current role to the next.
And here’s where it can get especially tricky: Each of the departments involved in talent management, recruiting, learning and development, and succession planning need strong lines of communication to align their succession planning support initiatives, such as tailoring training to employee gaps and recruiting talent identified as necessary to filling key roles.
Measuring the success of your succession planning strategy is critical, both along the way and at regular intervals. The best way to measure growth in emotional intelligence won’t be as straightforward as whether an employee can code a particular language, so adjust accordingly.
Creating an effective succession planning strategy is not a one-and-done endeavor, and there’s too much at stake not to give it the attention it deserves.
“People are so much more able to move where and when they want to because the skill set is between their ears,” Feiman said. “We have to create growth opportunities to reward employees… and [that also help] the organization. It’s as important today as it’s ever been and will [remain] so in the future.”
Source : https://searchhrsoftware.techtarget.com/feature/Three-keys-to-an-effective-succession-planning-strategy