Succession planning has come a long way from the days when it usually meant simply putting names in boxes on organisation charts. Effective succession planning has evolved to a process by which successors are identified for key positions, and career development and associated activities are planned accordingly. Here are the key steps in developing an effective succession plan…
1. Decide on the depth of your succession plan.
Although the most common model for corporate succession planning focuses on the most senior jobs in the organisation (the top two or three tiers), a broader-based model where a similar philosophy and processes are applied to a much larger population (managerial, professional, and administration) is becoming popular. Sustaining the devolved model will require continued support of a committed management, so that identified successors will embrace the priority given to this process.
2. Identify the specific qualities you seek in suitable candidates.
Whatever you call them – critical success factors, key leadership criteria, core competencies – you must spend time identifying the qualities you are looking for in staff and want to develop further. A suggested process is one of multiple dialogue which involves collecting views of selected individuals and groups, testing those views – focus groups could be a useful tool here – and making any necessary amendments to the list. This approach will not only help to ensure that the view taken by the organisation of an individual is based on objective evidence but also helps to gain the commitment and ownership of those who are likely to be succession candidates. If you are having difficulty identifying those qualities, this could indicate you need to spend time defining the business you are in. Constantinos Markides in ‘All The Right Moves’ outlines a straightforward and useful process to follow, providing a clearer picture to help identify the qualities required.
3. Identify high-potential candidates.
A previous decision about the depth of your plan will affect the nature and size of any list of succession candidates. If your plan is for a devolved model, the list must be sufficient to accom-modate predicted demands for a wide variety of positions that may become vacant, as well as any others needing extraordinary skills or qualities. Names on your list should also reflect your equal employment policy: succession planning can never be a stand-alone concept. In identifying a strong talent pool…
- Avoid the problem of incumbents choosing and developing successors who are much like themselves, thereby perpetuating the status quo and limiting diversity. A highly homogeneous organisation is susceptible to disease.
- Ensure candidates’ values match closely those of the organisation. Jack Welch, when CEO of General Electric, said: ‘Competencies are critical, but the company’s values are even more central.’
- Ensure that all employees understand the identification process and how it works.
4. Work wisely to retain your stars.
Your retention plans must go further than dangling handsome financial packages. Research tells us that people who make career decisions based on money only will always be on the lookout for higher paying positions – they’re liable to jump ship when someone offers them a better package. Your successor candidates should be given opportunities to participate in a rich variety of assignments with opportunities to display leadership skills, become increasingly visible in the organisation, gain and handle recognition for their contributions, and receive adequate coaching and mentoring. Share these mentoring and coaching roles among incumbent leaders with information generated about candidates being reviewed regularly. Ideally, discussion about performance and progress should focus on completed projects, so, wherever possible, candidates should remain in their existing posts to see their individual projects through to successful completion. In 2002, the Board of the Australian Broadcasting Commission delayed appointing a new Managing Director, opting to give maximum time for a successor candidate to demonstrate his skills as Acting-Managing Director. His demonstrated success in this acting role resulted in his appointment to the top position.
5. Measure, reward, and review.
For a succession plan to be effective, it must be able to measure any performance improvements in its successor candidates. Successful candidates must then be rewarded in ways that are valued by individual candidates. Such rewards could vary from bonus compensation based on the extent to which they meet stated goals and objectives to an all-expenses-paid weekend for the candidates and their life partners. Any review must take into account the full process from identification, planned individual development, and eventual succession or job filling.
6. Act now.
Training and preparing candidates for key leadership positions cannot be rushed. A well-planned, structured succession strategy lays the foundation for your organisation’s continued success, even when you’re not there. Do not wait until it’s too late to consider business succession – procrastination can paralyse.