Succession Planning: In search of tomorrow's leaders
12/12/2007
Article published in Personnelzone.com
12th December 2007
Written by: John Ferguson, Practice Leader at Right Management
Despite frequent discussions about the "war for talent" amongst HR professionals, succession planning is still an area business leaders shy away from. Yet the consequences of an ageing population are starting to place a greater focus and emphasis on developing future talent in both the public and private sectors. Undoubtedly succession planning is one of the greatest challenges facing organsiations today, but how can businesses tackle it?
Divide and Conquer
While succession planning and talent management are closely linked, they are not one in the same. Succession planning is the process of determining the key positions that support and drive business strategy, identifying the appropriate individuals able to step into these roles. Talent management is about the development and wellbeing of the future leadership of the business. It involves identifying a pipeline of emerging leaders with the skills, competences and capabilties to move up and through the organsiation and eventually take on a senior role. Once the individuals have been identified, HR Departments (HRD's) can invest in educaiton and in-house development processes in order to set them on the talent pipeline.
Finding out that there is no natural successor when a senior leader departs poses huge problems for HRD's, who are faced with the choice of promoting someone who is not ready or investing in head-hunters to bring in talent from outside who are not au-fait with the culture or strategy of the organisation. Both options can be costly in terms of time, investment and the amount of support and 'bedding in' an individual may need. Seeing talent management and succession planning separetly is perhaps the first of several steps a HRD can take to create a clear programme, and importantly, results.
Get an ideal in mind
Despite popular perceptions to the contrary, succession plans and talent management processes are not just for blue chip organisations or FTSE 100 companies. In fact, it is just as critical that SMEs give serious consideration to their succession planning as the tight-knit cultures present in smaller businesses means that the loss of a manager or senior executive can have a very significant and lasting effect if the gap is not plugged quickly and appropriately. In many cases, companies can find themselves and their bottom line suffering needlessly because the wrong person was placed at the helm.
For those organisations attempting a succession plan for the first time, the best advise is to determine the desired end result first. The process should therefore begin with setting out the skill sets required to executive particular growth strategies and achieve the direction in which they want the firm to grow. Understanding where the business is going makes it easier to pinpoint the success factors for the leadership roles of the future and allows the succession plan to have strong foundations, which are connected to the strategic intent of the business. Future leaders must be considered carefully, as the necessary skills will often include strong commercial and management competencies as well as technical knowledge - this makes it critical that HR Departments put in place the processes to recognise and develop these rounder skill-sets in individual employees at an early stage.
Identify your talent pool
Once it is clear what a business might need of its future leaders, the next step is to identify a pool of people with distinct strengths capable of succeeding across several different positions. Attempting to replicate what has worked well before can be fatal, and for this reason businesses must be cautious of creating new leaders in the old model. Instead HR and senior leaders should be watching for team players who have commercial acumen and leadership potential rather than just sector expertise.
This becomes particularly relevant for organisations operating under a partnership model, such as law firms or accountancy practices, or in cases where a business is divided into various streams. The traditional partnership model means that many firms lack a clear definition of leadership, with partners often only taking responsibility for there area of expertise, or the department they run, rather than taking an interest in the firm overall. This presents a particular challenge to those leading the succession plan.
Fortunately, many successful professional services firms have now created a 'New Deal' whereby partners have a collective responsibility for a firm's performance. This interdependence provides a real opportunity for senior partners to identify and develop junior partners and provide the motivations needed to retain start talent for years to come. At Right Management we believe that this principle can be applied just as effectively to any organisation that is being help back by a lack of cohesion amongst senior staff. By removing silo leadership, organisations can increase opportunities for cross-selling, greater efficiency and knowledge sharing as well as create a strong team to drive the business forward.
Succession plans must be part of a company's long-term development and growth strategy, whilst being adaptable and reactive to change. And whilst companies must remain loyal to the succession plan, it is never enough to simply create the plan and move on under the assumption that a box has now been ticked. Even if the company perceives to have a successor to a current position lined up, this may be subject to change, as when the time comes it may no longer be suitable either for the business or the individual. If companies remain objective and are willing to accept diversity and change this will go a long way to creating years of stable leadership.
If a succession plan is to be executed successfully it must be viewed as a company-wide issue, not an HR issue. It presents the opportunity to the HR director to develop strategic partnerships in order to be perceived as competent and capable of engaging in collaborative risk management. For too long, HR has been viewed as a function of the organisation, rather than a strategic partner, but this must change if the organisation is to determine the strategic direction of the business and identify the emerging leaders to drive it forward. It is therefore essential that HR directors develop the gravitas to work with business leaders across all areas of the business and gain the trust and respect of the board. On in this way will they begin to be viewed as a peer to other directors, rather than an advisor to be used or ignored at will.
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