Succession Planning is Not Just Succession Planning
Michael Couch and Associates Inc.
Succession planning is a hot topic.
It is not surprising why. Organizations are facing some challenging talent realities.
- In North America and Europe, large numbers of the baby boomers are nearing retirement. For one of my manufacturing clients, January 2011 was an all-time record month for retirements.
- In growing Asian markets, there is a dearth of capable middle management talent.
- Top-notch talent is heavily recruited.
What is surprising is the wide variety of succession planning definitions and approaches.
On one end of the spectrum, succession planning is a process for identifying internal people with the potential to fill top leadership positions. The focus is on creating back-up lists, mostly by executives nominating candidates from their own departments. The problem with this approach is that the hit rate on backup lists is often very low – about 15%. Not a very effective use of time and resources.
I prefer a much more encompassing definition and approach to succession planning, something akin to true workforce planning and development. The definition is based upon the components required to achieve a return on the time and resources invested in the process. My definition:
Succession Planning is a deliberate and systematic effort to identify leadership requirements, identify pools of high-potential candidates at all levels, accelerate the development of mission-critical leadership competencies in the candidates through intentional development, select leaders from the candidate pools for pivotal roles and then, regularly measure progress.
To be more specific:
- Deliberate and systematic effort to identify leadership requirements
Talent has value only if it makes a difference in executing the strategy. Succession planning should be a deliberate, standardized component of a company’s strategic planning process and focused on advancing the strategy. Mission-critical roles and competencies should be identified based on the strategy.
- Identify pools of high-potential candidates at all levels
Succession planning should not be solely creating back-up lists for top of the organization. The focus should be on creating a strategy-capable organization at all levels. (A client referred to it as “building organization muscle.”) The assessment of talent should be robust, standardized, and candid talent reviews used throughout the organization that can role up to create a complete picture of the organization’s ability to execute the strategy. Leaders at all levels are held accountable for improving the organization’s capability. (Read more about Assessing Your Organization’s Talent)
- Accelerate the development of mission-critical leadership competencies in the candidates through intentional development
Not all competencies are created equal. Different business strategies (there’s that strategy word again) require different leadership capabilities. Most mission-critical competencies are rare commodities in the workforce and tough to develop. They can be strengthened through challenging/developmental roles and assignments supported by feedback, coaching, mentoring and action-based learning.
- Select leaders from the candidate pools for pivotal roles
The picture that effective succession planning creates is of a race where leaders at all levels of the organization are in the hunt, some just lead the pack at different times. Knowing who’s in the lead (development-wise) and then assigning them to pivotal roles, projects or assignments is the key.
- Regularly measure progress
Good succession planning generates rich talent data. Mining the data for progress keeps the process on track, indicates when and where corrective action is needed, and confirms the ROI of the effort.
The result of succession planning as defined here is a pipeline of promotable or expandable talent that is future-focused and driving the strategy.
How closely does your company’s definition of success planning match?