Succession What?
I recently had breakfast with a friend of mine, a businessman who owns a company with about a hundred employees. Among the many things we talked about that morning was his desire to retire in the near future from the day to day involvement in his company. His longer term plan is to just retain his role as the Chairman of the Board until a suitable buyer for his company could be found in a couple of years. While he’s comfortable with the individual he recently made the president of his company, his nagging concern is that he doesn’t have enough of the right people in other key positions. Even more nagging is the fact that he doesn’t have a development plan in place for those individuals within his company who could fill those key positions.
Sound familiar? Unfortunately, too many organizations, irrespective of size, haven’t done a good job of identifying and developing their bench strength. “By some estimates, as many as 80% of boomer business owners lack succession plans.”¹ When it comes to “succession”, in our experience, organizations fall into one of the following four categories:
Crisis Mode
The organization waits until there is an opening and then there is pandemonium as they scramble to find a replacement – usually from the outside. Even if they hire the right person in haste, the organization struggles for at least six months as the new person slowly becomes acclimated to the organization. However, if they hired the wrong person in haste, they then get to go through the whole process again. Meanwhile, potential internal candidates become resentful since they feel they’ve been overlooked and haven’t been provided training or developmental opportunities to qualify them for that opening/promotion. So, now we can add turnover and low morale to the pandemonium
Placement Planning
The organization has done a reasonably good job of identifying key positions and often times will have two or three people designed as possible backups to those positions. However, in far too many cases the designated replacements are a year or two away from being ready to take on the key position and, if promoted or rotated into the position, the organization struggles as they slowly grow in the position. In those situations where the organization knows they have no available internal backups and will have to hire from the outside, they either haven’t identified those viable outside candidates or those identified are not available or willing to move when the opportunity occurs. So, it’s back to crisis mode, pandemonium, turnover, and low morale.
Succession Planning
Succession Planning differs from Replacement Planning in that it focuses on developing people rather than merely identifying them as possible replacements. Its goal is to build deep bench strength throughout the organization so that whenever a vacancy occurs the organization will have a number of qualified internal candidates who can be considered for advancement.
Historically, this involved identifying top talent early, grooming candidates for promotion and then moving those employees through jobs to prepare them for future opportunities over many years. However, employees today are much more likely to leave the organization before traditional succession plans prepare them for those future openings. According to a 2018 Deloitte study, “Among millennials, 43 percent expect to leave their jobs within two years if given the choice; only 28 percent expect to stay beyond five years if given the choice. Employed Gen Z respondents express even less loyalty, with 61 percent saying they would leave within two years if given the choice.”² A much improved situation over the first two categories, but still not responsive enough to satisfy the demands of today’s workforce.
Talent Management
An integrated Talent Management approach is one which takes into account all facets of an organization’s human capital. It’s one geared toward driving the success, growth, and profitability of the organization. It focuses on the rapid change in markets and its demands for different skills, the demands and expectations of current and future employees, the recruitment process, assessments, onboarding, performance management, succession planning, learning and development, mentoring, coaching, leadership analysis, both competency and leadership development, etc., etc. Given the mobility of today’s workforce (as noted above), it’s of vital importance to retain key talent until such time as openings occur and that talent is qualified to assume the new roles. The benefits of implementing a Talent Management approach are many; particularly to “millennials, 87 percent of whom want development in their jobs.”³
• The Talent Management plan will be tied to your organization’s overall strategy.
• The skills, capabilities, and competences your organization needs today and in the future will be clearly identified and communicated.
• Through the use of validated, reliable assessment tools and surveys your organization will be able to ensure you’re hiring and then developing the right talent.
• The organization’s ability to retain people with the required skills, capabilities, competences, and aptitudes to meet current and future needs will be increased.
• Employees and managers will be empowered (and motivated) to develop themselves so they can contribute to their full potential.
• Engagement, retention, and productivity will improve.
Regardless of where you are, we can help – check us out our assessment tools and leadership development expertise.
References:
1. “Baby boomer retirements put firms at risk” by John Gallagher, Columnist Detroit Free Press USA TODAY NETWORK, 11/12/17
2. Deloitte (2018). 2018 Deloitte Millennial Survey
3. Adkins, A. and Rigoni, B. (2016). “Millennials want jobs to be development opportunities.” Gallup