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Best Practices For Succession Planning – Succession planning is a complex process, especially in the rapidly changing economic environment in which we operate. However, companies must prepare for the future in order to remain competitive and succeed. To help you successfully navigate your organization through these changing times, let’s look at the most common succession planning challenges and how to overcome them.
Succession planning is a business strategy used to identify and develop future leaders to fill roles identified as critical within an organization. This is the process of ensuring that you have successors for all of these key roles when you need to fill positions.
Best Practices For Succession Planning
In some organizations, succession planning focuses on C-level and senior manager-level roles. In other cases, it involves broader positions that the company considers strategic for the business.
The Ultimate Guide To Succession Planning
The goal of succession planning is simple, but important. This helps ensure your company has:
While succession planning is considered important by the majority of organizations, only 13% of organizations say they do a good job of developing leaders at all levels. Effective succession planning is challenging for several reasons. Let’s look at some common succession planning challenges and how to overcome them. 1. Take the long view
Identifying the roles that are important to your organization is the first major challenge of succession planning. Many companies are focusing on key roles today rather than key positions five to ten years from now. To plan well, you need to understand your organization’s long-term strategy and goals and the roles and skills needed to achieve them.
Companies like Netflix take a long-term view through scenario planning, which gives them a competitive advantage in meeting and exceeding financial goals. CEO Reed Hastings mentored his newly appointed co-CEO Ted Sarandos for several years before making the final decision.
Dei Succession Planning Strategies
Most importantly, he selects a candidate who has a proven track record of identifying, monitoring and responding to the most likely market trends.
“TED sparked a revolution in our content strategy that was ahead of its time and critical to our continued success.”
According to the Institute for the Future, 85% of the jobs that will exist in 2030 have not yet been created. In its report, The Impact of Emerging Technologies on Society and Work by 2030, the company argues that the future of work will be more mission-oriented. This leads to companies competing for talent to complete tasks rather than workers looking for jobs.
HR can help facilitate scenario planning by leveraging underlying labor market trends to create a dynamic pool of succession candidates. These people should be well prepared to meet the current and future needs of your organization. 2. Unlock Possibilities: Collect, measure and integrate feasibility and performance data
Top Tips For Succession Planning In Your Family Business
HR professionals and company leaders often get data from performance reviews and get a good idea of how employees are performing. However, you should consider ability when choosing the right candidate for your succession planning.
Measuring efficiency and linking results with performance data gives you a clear idea of where to focus your efforts. The popular 9-panel grid is a good starting point for measuring potential and identifying future stars that you can train and develop into your succession pipeline. However, to overcome the “one and done” criticism of this approach, it is important to diversify the data points.
High Potential (HiPo) candidates are willing and able to handle executive level functions. They are also willing to participate in your organization’s succession development program.
Organizations often do not keep track of how their succession planning is going, what they are doing, and what is not going well. Difficulty deciding exactly what to measure is one of the most common challenges in succession planning.
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An important thing to remember when implementing successful succession metrics is to measure the outcome of the succession plan rather than the process. Examples include:
According to a Harvard Business Review analysis, mismanaged top management turnovers cost the S&P 1500 as much as $1 trillion in market value.
Microsoft is almost one such example. In 2013, the “golden metric” of successful succession management – the percentage of key positions filled internally. The company’s leadership sought candidates primarily from outside companies to replace underperforming CEO Steve Palmer. Qualcomm’s COO Steve Mollenkopf and Ford’s Alan Mulally are good choices in this regard. However, both withdrew from the competition.
Microsoft later approached Satya Nadella for help. Since then, he has proven to be a great fit for the company’s culture and bottom line. It is widely believed that the sprawling structure blocked a bullet. Hiring a senior manager or executive from the outside is usually more expensive, bad for public relations and lowers the morale of internal candidates.
Succession Planning Best Practices For Your Business
Try our requirements tool to determine where you want to go based on your HR career goals and skills.
McKinsey’s Diversity Wins study found that companies with the most racially and culturally diverse executive leadership are 36% more likely to beat their competitors in profits. Gender diversity is positively associated with higher profitability. High-performing companies have 7-18% more female executives than their low-performing counterparts.
Recognizing and overcoming biases during the succession planning process can help bring diversity to your bottom line. Here are five biases to watch out for:
For example, former Atrium Health employee Paul Ramsey says he teaches managers a 360-degree approach, so multiple perspectives are considered during the review and selection process. Heads of various departments meet to provide feedback on a candidate’s job performance, which allows for “healthy discussions that people can bounce back from,” Ramsey said.
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Deloitte has developed a succession planning tool that combines data from various sources to identify a suitable successor. This data includes historical succession results and real-time information about employee skills and abilities. Armed with such insights, companies can build a high-performing, diverse talent pipeline. 5. Execute the development plan
Employees and managers are so busy with their day-to-day responsibilities that they don’t always have time to implement development plans created for them. That’s why it’s so important to find ways to encourage potential successors to learn and grow.
Special tasks with job rotation and achievement milestones help keep development on track. For example, a candidate might be tasked with analyzing which predictive technologies are best integrated into existing enterprise platforms. Reporting these findings to the CTO may be the next milestone.
Motivating executive leaders to achieve their goals means building “action learning” into their agendas. It is learning coupled with real scenarios. It involves a group of skilled employees who come together to help solve organizational problems.
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In a half-year, six-week action learning program at medical research firm Eli Lilly, 18 employees were identified by HR and their line managers as having executive-level competencies. The CEO proposes a problem to be solved, and the team makes a recommendation. In 2000, the group recommended the appointment of an electronics executive and funded an e-commerce development plan they had secured. The CEO readily accepted both proposals.
When you connect learning with real-world scenarios that help solve organizational problems, motivation to follow through is greater because candidates can see concrete results from their efforts. 6. Keep your succession plan up to date
Succession planning is not just one thing, although it is often thought of as such. You should set regular intervals to review, evaluate and update your succession plan based on changes in your organization.
Changes that trigger the need to update succession plans vary by organization and may include:
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Even if there are no major organizational changes, you should consider changing plans and review them regularly. As people engage in career development, reassess their readiness for new roles. Likewise, when individuals join the organization, determine whether they have the capacity to perform and update plans accordingly. 7. Manage employee morale
Managing employee morale is often one of the challenges of overall succession planning. Some employees may be disappointed by not participating in the program. Others may feel that you are increasing their responsibilities with vague promises of promotion.
You need to know how your succession planning works. Communicate criteria for being part of the talent pool and developmental expectations for advancement. This type of transparency helps ensure that your employees understand why one person is involved in a program or promoted and why someone else is not.
Don’t forget to reiterate that candidates are part of the program. This way, they are more likely to continue learning and development and stay with your company long-term.
Best Practices In Succession Planning
You can manage the expectations of those preparing for the promotion by communicating the timeline. Let employees know when you plan to vacate key positions and how long the orientation process will take. Finally, an even number of candidates should be maintained for each key role. Too much competition will weed out the best talent
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