Succession planning is a process of identifying and developing current employees with the potential to fill key leadership or high-stakes positions in an organization. As a formal concept for talent development, succession planning has high relevance in a competitive market. Through succession planning, Human Resources works in tandem with top management to select, train and empower a specific individual to undertake a job with higher authority and responsibility. Traditionally, succession planning has been viewed as aimed at filling the CEO or the highest position in an organization. However, given the growing challenges of managing today’s complex workforce, maintaining a talent pool of middle to senior management has become just as important as ensuring a plan for the topmost leadership role.
Succession planning is an important HR mandate today. Organizations spend significant resources in sourcing and developing a talent pool which can successfully meet present and future business challenges. Stiff competition drives organizations to differentiate themselves – not only with their product or service offerings but through their talent pool as well. Business leaders and high potential managers now define how organizations are perceived in the market and society at large. The threat of talent poaching combined with a mobile workforce propels HR to ensure existing talent is utilized optimally and contingency plans well in place to meet the challenge of unanticipated exits at mid to top levels. Succession planning then becomes an imperative where the organization proactively prepares to tackle such contingencies by creating a pool of future performers. More recently, succession planning-enlightened organizations are integrating succession planning with their strategic planning processes and corporate policies. This integration is taking place not just at the top level but has become a proactive management strategy all levels of management. Integrated with HR processes, procedures and components such as assessment, talent management, performance and potential appraisal, and leadership pipeline development, succession planning today extends beyond the realm of filling vacant roles created from vertical employee movement in the organization. Effective succession planning enables the deployment of an organization’s talent on demand, as needed, currently and in the future.
A well thought-out succession plan is vital to the growth of the organization because the individuals identified in the plan will eventually be responsible for ensuring the business’s success. This process entails an overall development of employees at any level to make sure that they can effectively handle responsibilities they will be given in the next few years. Organizations with a clear vision for their future should equip themselves to handle career progressions to ensure that employee performance and productivity do not get adversely impacted from internal movements and exits.
Succession planning begins with identifying critical positions and understanding their behavioral and technical fitment criteria in detail. This involves the process of role study and analysis that delineates the parameters for success on the role. In general, sufficient time needs to be devoted to identify abilities, personality & behavioral dimensions and communication skills that are required to hold a particular position, besides technical and other skill sets. After identifying the desired attributes, it is essential to select candidates from the talent pool who possess those attributes. The objective is to identify those with the potential to assume greater responsibility in the organization. HR needs to closely involve managers and leaders to identify high potential talent since these individuals will know where the hidden talent lies outside the inner circle. At times low employee performance might be more an indication of their potential being underutilized than a case of not having the right set of attributes.
Assessment is a key practice in effective succession planning. There are many assessment tools and approaches available to identify the future potential of employees, ranging from personality, ability and communication assessment tools, team-based interviewing, job simulation techniques to full-fledged assessment centers. However, the role of assessment does not end with identifying the right talent for development. In many organizations, assessments are a key component of a larger framework for talent management, known as succession development. Succession development incorporates assessment in the development plan as a key exercise for developing high potential talent. Development activities will enable identified candidates consolidate them strengths and work on areas of improvement as they pertain to the new role.
An effective succession planning and development process will result in both short and long term benefits to an organization. In the short run, organization-wide knowledge of a succession framework creates a positive and definite context for talent to flourish and individual career aspirations to be nurtured. It also ensures that managers at all levels understand the processes in place that will reward desired behavior at the workplace. As a systematic and long-term approach preparing high potential talent to handle the responsibilities of next higher levels in future, it is a logical, standardized, objective and scientific method towards achieving business sustainability. Succession planning offers a clear perspective on who should be selected, why they should be selected, what skills and competencies these individuals currently possess and what is required to be developed in them. Answers to such questions are critical and differentiating factors while identifying candidates for succession. Moreover, a well-implemented succession planning and development strategy reduces the randomness in an organization’s processes and managerial development movements. It also anchors the management’s focus to developing talent internally. Developing existing organizational talent is not only more cost-effective but also results in creating a more effective and readily available leadership pipeline.
A formal succession planning process is a proactive approach that helps HR professionals anticipate problems in the process before they get started, which in turn helps avoid negative and dysfunctional situations from incorrect assignments to key roles. It fosters cross-functional development since individuals in critical roles will need to possess a well-rounded knowledge of the business. Lastly, succession planning has a positive and lasting impact on the organizational culture by ensuring transparency in the succession and development process, giving talent priority over subjective preferences.
A few caveats to be kept in mind while implementing succession planning. An ineffective or flawed process may result in successors with inadequate competencies for the role. A comprehensive assessment strategy needs to be instituted in this process to ensure objectivity and accuracy in the search for a best fit. Valid and reliable assessment will help in understanding the strengths and areas of development for candidates, in order that appropriate critical development experiences may be offered to those identified for succession. Second, a myopic view of talent development may lead to core competencies being missed in the evaluation process. Third, an organization should take into account different ways of developing people internally. The focus should be on developing people in important competencies like critical thinking, decision making, planning and organizing, strategic thinking and problem solving as well as making them aware of their behavioral strengths and weaknesses, in individual and team contexts. There are competencies and behavioral skills essential to hold key leadership positions that need to be identified early on in the planning process. Finally, a successful succession planning program will depend on the support from the current leadership. Explicit support with implicit anxiety about being looked over for succession will only create a façade that does not truly address leadership requirements for a long-term impact on the organization. In the right hands and with the right set of infrastructure, succession planning is a valuable vehicle for organizational change that leads to positive growth for the organization.
by Saurabh Singh, Head, Pearson TalentLens The article appeared in People and Management magazine, December, 2011 issue.