Action Insight Inc

The Conference Board reported that in a survey of Fortune 1,000 companies only 8 percent of the executives surveyed rated their firms' overall leadership capacities as excellent.

The reality of business today is that a number of key executives and talented professionals are coming up for retirement. Organizations have realigned and resized themselves to a point where the talent pool that would have been ready to step up into key roles are either not ready or not there. …It will be a talent crisis.

To handle this crisis companies need to integrate succession planning with their strategic business plans and view it as a long-term, continuous process.
To begin the process Human Resource Professionals should begin to consider the following steps to successful succession planning.

Process Steps

1. Threat Analysis

Succession planning requires a strategic perspective. What are the strengths, weaknesses, opportunities, and threats that may impact your organization’s leadership? What are competitors doing to you? Will the organization be growing, contracting, acquiring, divesting, etc.? What will government likely legislate that will impact you?

Monitor the social, legal, economic, and political environments to determine how they might influence succession planning in your organization.

Consider the organization’s demographics. Are there individuals that could be retiring in the foreseeable future? What does your talent pool look like? What is happening with the organization’s culture? How is change going to impact the organization?

2. Create a Succession Plan

Succession planning requires planning. Does your organization have a well-developed plan for employee and leadership planning efforts? How are individuals in the pipeline assessed in readiness for the next level?

Succession planning needs to be conducted with consideration for its impact on the organization's leadership needs.
Define and target key positions where the company's next leaders could come from and go to.
Understanding Position Needs

3. Know Your Position Requirements

Effective succession planning requires clarity on the technical and behavioral requirements necessary for success in the targeted positions. All positions should be evaluated to identify the essential competencies necessary for success in key positions and their feeder positions. These requirements should be used to assess new hires, promotions, and developmental assignments.

4. Defining Career Paths

Once positions are evaluated, establishing career paths and the ability to describe the requirements for pursuing the path becomes easier. Creating effective career paths requires two components, knowing the requirements for the next level and creating clear definition of how to develop the necessary skills.

5. Link Succession Planning with Career Development

Succession plans should be linked to career planning and development. One study reflected the positive impact of having corporate career counselors on not only focusing development efforts, but also on improving retention and employee satisfaction.

Developing Talent

6. Assessing Talent

The ability to assess and determine successor readiness can range from subjective to objective. Are successors assessed against clearly defined criteria or are individuals shuffled from High Potential (HiPo) to Low Potential (LoPo) status and back again depending on favoritism, the leadership philosophy of the moment, or some other wind of fate?

Multi-rater assessment can be very time consuming and demoralizing, and some say it can negatively impact the bottom line. Most people don’t like feedback that challenges their own self-image, hence a demoralizing impact if hit with overwhelming data. Using a position specific approach to identifying and assessing essential competencies can not only minimize the impact of both issues, but add value to understanding development needs in key competencies.

Would position specific multi-rater assessment be a useful tool for helping team members gain feedback into areas necessary for improvement? Will the information be used for just developmental purposes?
Always use a competitive hiring process when positions are vacated so they're filled with the best available talent.

7. Regular Performance Discussions

Regular performance discussions with significant verifiable examples of how team members have demonstrated the performance expectations established by position requirements are important. Managers should conduct regular discussions with team members and provide coaching on how to ensure ongoing development and readiness. Team members should have primary responsibility for gathering and documenting verifiable examples.

8. Training and Development

Training time is expensive. Yet, combining training programs and development assignments and experiences that focus on developing specific skills can help shorten the learning curve necessary for success.

Are training programs linked to development plans requiring that the team member effectively use the skills over time? Are verifiable examples gathered, reviewed, and refined with on going coaching?

9. Defining Specific Learning Expectations

Are development assignments undertaken just for “punching a ticket” or are there specific learning expectations and expected skill development? Specific learning expectations should be clearly defined and measured for each developmental assignment. In other words, did the team member learn new skills and refine existing skills necessary for the next step, or did they just punch a ticket?

Tracking and Input

10. Management Input On Readiness

Are managers asked to provide verifiable input on readiness of potential successors based on demonstration of competencies?

Are all managers permitted extensive input in the succession planning for their departments?

11. Replacement Charting

Use replacement charts (whether automated or paper) for employee/succession planning.

11.5 Tracking People and Requirements

We have a human resource information system (HRIS) that is used to track talent in support of succession planning.

None of these steps needs to be made overly complex and most can be integrate across Human Resource systems.

Moral: If your organization is not focused on succession planning, organizational leadership and key talent will be subject to the fickle finger of fate. Fate is usually not kind to those who do not plan.