Smart companies have a strategic succession planning program that mentors, trains, and develops the next generation of corporate leaders.
Prince Charles must be getting impatient. As ‘king-to-be,” he’s been waiting a long time to succeed the throne and become Britain’s reigning monarch (although maybe he’s been happily distracted for a while by the birth of his grandson).
Charles is well-prepared to succeed his beloved mother, Queen Elizabeth II, because his entire life has basically been a dress rehearsal for the moment when he steps on Britain’s biggest stage and gets the crown.
By definition, the monarchy’s very foundation is succession planning. Royal heirs spend their lives training to succeed the throne and learning the duties of a future monarch. I guess you could say the royal family’s motto is: always be prepared.
This finely-honed system of succession planning, which prepares individuals for specific leadership roles, is a model every business and organization should follow because, eventually, every CEO will retire or leave the organization.
Being unprepared for the future
Unfortunately, too many organizations remain unprepared for the eventual departure and/or retirement of their top leaders. Succession Planning: What is the cost of doing it poorly . . . or not at all? by Todd Hoffman and Stanley Womack eloquently identifies the problems with current succession planning methods.
Even though a number of companies claim that they have a succession planning program in place, not enough investment is made in mentoring successors or developing training programs that build leadership skills in middle managers, say Hoffman and Womack. Often, planning efforts focus mostly on just a “handful of high-potential executives who are considered next-in-line for C-suite positions.” (Succession Planning)
Beyond the top two layers, “the succession planning team typically has only minimal awareness of the employees who actually produce results for the company – the “pivotal talent” that makes the organization successful.” (Succession Planning)
According to Hoffman and Womack, there is also a lack of deep understanding about the skills and experiences these people will need to become more well-rounded and capable of handling increased responsibility in the future.
Looking at the costs vs. benefits of succession planning
It’s important to realize how big an impact succession planning will have on your business. Succession planning that is properly conducted “can provide a significant long-term competitive advantage, ensuring that the company has the talent, skills and expertise to achieve its strategic objectives over time.” (Succession Planning) Without succession planning, a company will be less prepared to meet future challenges and will ultimately struggle to stay competitive.
Identifying 5 elements of success for future preparedness
Hoffman and Womack offer five elements of success for an effective succession planning program, which usually includes key people (i.e. senior managers, human resource executives, training and development professionals) from departments throughout the organization:
1. The program is integrated into the company’s long-term business strategy. This basically means that management thinks beyond today’s promotions and tomorrow’s new hires. They look for the skills and know-how needed to be competitive in the future, keep an eye on the direction of their industry, and plan for their company’s long-term goals.
2. The senior management “owns” the planning program. Buy-in from corporate leaders is crucial. Coaching and developing all kinds of talent, both high and low, should be a key part of their focus.
3. The company continually evaluates key talent to decide if pivotal employees have enough competency and knowledge to move up the ladder. It seems like a paradox, but just because someone is doing well in his or her position does not necessarily mean they are ready for promotion. If a high-performing employee meets the standards for a leadership position, then by all means offer the promotion! Potential candidates who lack the needed skills yet will need to fill the gaps with additional training or work experience. And yes, ongoing evaluation also means that a succession planning team needs to be assembled.
4. The company ensures that the program connects to other talent management processes and methods. Some of these practices include job titling, training, compensation, learning and development, and rewards and recognition. Requiring employees to accept diagonal or lateral positions may be necessary to help round out their proficiencies and strengthen their deficiencies.
5. The company monitors and evaluates how well their succession plans perform. The best strategic plans have a system for measuring success and making necessary adjustments. Some examples of criteria used by successful companies include measurement of the decrease of turnover costs, percentage of key openings filled by internal staff, and the amount of successful promotions.
Getting started sooner rather than later
It might seem overwhelming to try and implement all five of these steps at once. That’s understandable. A robust succession planning program is not for the faint of heart. However, the sooner you strategize and execute a plan, the sooner you will reap the benefits.
In Succession Planning: an Outline for Kick Starting this Critical Process, Tim Gould mentions two ways that succession planning helps companies safeguard their productivity and profitability in this unstable economy:
• Succession planning strengthens your talent pool. “The process of identifying high (and low performers),” says Gould, “and possible gaps in your employees’ skillsets gives companies an opportunity to make adjustments before they’re left in the lurch when a key team member departs.”
• Succession planning makes better use of your current talent. Employee development is an assumed element of any effective succession planning program, says Gould, which means staff members can be allowed to “stretch their skills, increase their earning power, and likely strengthen their commitment to sticking around.”
Addressing top HR challenges with good planning
Since one of the major concerns of HR professionals over the next ten years is retaining and rewarding top talent, succession planning appears to be one of the best ways to address this issue! Let’s not allow the Royal Family to be the only organization that knows how to train, sustain, and retain its leaders.