A few months ago, we looked at what would happen if a key employee or even the majority of the workforce won the lottery and made themselves scarce. We touched on the importance of contingency plans and now we look more closely at the importance of succession planning for a multitude of contingencies.
What is succession planning?
It is a strategic approach that makes sure the organisation has the necessary talent and skills and that vital knowledge and abilities will still be there, regardless of who leaves or stays.
Issues covered by a succession plan include:
High rates of staff turnover
Gaps in knowledge and experience
A rapidly changing work environment
A workforce whose average age is increasing
Demands for diversity within the workforce
The need to look at the issue of succession planning extends right across the organisation; everybody in a managerial position should spend time considering what would happen if they were no longer able to discharge their duties or if a critical employee left the company.
Line managers can set up succession planning objectives when they conduct staff performance reviews; involving an employee can bring insights that are not immediately available to more senior staff.
Senior management, with their wider perspective, can often identify new talent and provide informal guidance, advice and mentoring.
C-suite executives can communicate their vision of internal talent management and ensure that the vision is embedded into the workplace culture and ethos.
HR plays a very important role – it is there to help management put in place a plan for developing future managers and form a group of employees who are ready and capable of stepping into any unexpected gap that arises. This can involve training, mentoring or possibly moving employees so that they are in place long before any departure occurs.
What are the objectives of succession planning?
There are three main reasons for putting a succession planning scheme in place within an organisation.
Firstly, it will identify positions that are work-critical and how they can be filled. This will involve creating a pool of staff who have the potential to become successors and building a workplace culture that actively encourages the dissemination of knowledge and the development of employees.
Secondly, it will build HR programmes that target qualified individuals whose expertise is needed to ensure that an unexpected departure does not leave the company short of a key competency or skill.
Finally, it will create a framework to identify what skills are needed for each critical position, pick out potential candidates and develop the skills needed by use of planned learning.
Benefits of Succession Planning
A succession plan can bring great benefits to the company.
It can put the right people in the right place at the right time, thereby achieving a seamless transition in the event of an unexpected departure.
The creation of groups of employees who are already qualified to step into the breach and fill critical positions.
It can provide a much-needed sense of stability for the company, which can feed through into improved productivity and performance.
It can help individual employees reach their career goals and move up in the organisation, giving them a heightened sense of involvement and fulfilment.
It can improve the flexibility of the workforce, enabling them to more quickly and effectively respond to changes in the workplace or the commercial environment
Five Step Approach
Most effective succession plans include five key steps which can make the difference between success and failure.
Step 1: Identify critical positions
These are the positions without which the organisation could not effectively meet its objectives. A ‘what if’ exercise should be conducted to identify such positions. Managers also need to look at their employee demographics and extrapolate from them. For example, are many of the critical positions occupied by employees who are within ten years of retirement age?
Step 2: Identify competencies
These represent the basis of the skills requirements for any new recruit. It’s important that identification of competencies is done in co-ordination with the position holder; a job description may list the skills that were considered important when the position was created or last filled but things may have changed since then and most post holders have a fairly good idea of the competencies that are necessary to keep the job going.
A programme of position profiling within the organisation can also highlight any gaps in current position holders’ skills portfolio, thereby identifying training and development needs.
Step 3: Identify succession management strategies
Strategies include the development of internal talent pools and recruitment where they prove insufficient for the demands of succession planning.
Step 4: Document and implement succession plans
When a strategy has been adopted, it needs to be documented and laid down in an action plan. This will require clearly defined timelines and the roles and responsibilities that attach to each member of management.
Step 5: Evaluate Effectiveness
A process of regular evaluation will ensure that the succession planning strategy is always current. A workplace is a fluid and changing environment and it is easy for plans to become outdated.
If an organisation does not plan for the future, it is in danger of being overtaken by events as well as competitors who do have succession plans in place.
A succession plan should be as fundamental a part of the business as its financial plan. As it is focused on expansion as well as gap filling and reacting to unexpected developments, it can be used as a tool to manage a growing business and ensure it transitions from small to medium (or from medium to large) effectively, efficiently and flexibly.