Building a Robust Succession Management Process
Building a Robust Succession Management Process
Michael Couch and Associates Inc.
In a 2011 survey by Right Management, 91% of the 43 participating companies indicated that they had made some attempt at succession management but only 9% had a formal process. Seventy-Five percent acknowledged that they needed help to make their succession management process stronger.
So, if your company counts itself in the 75% and wants to improve succession management, what do you need to do to build a robust process? Before we get to that answer, let me be clear on how I am defining succession management. (Notice that I am not using the term succession planning — there is a difference.)
Succession Management (SM) s 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. (Click here if you’d like to learn more about each of the component of this definition)
With that definition in mind, here are the key building blocks for a reliable and effective succession management process.
Build the Business Case. Succession management is no different from any key business process. It will more likely create value if the business case is firmly established from the start. This does not mean coming up with a justification for what you already want to do. It means creating links in a Value Map – from key business goals or measurements to potential outcomes from SM that will help leverage the goal to the components or capabilities of the success process that will create the required outcome.
An Example of a Success Management Value Map
The Value Map for succession management will not look the same for all organizations. It also means that benchmarking SM is not very useful unless the other companies have a similar Value Map.
A stakeholder analysis is an important component of the Case. It identifies the key players in the process, the role they will play and how they should be involved. Including key people in building the Business Case also helps in the next building block . . .
Build Leadership Commitment. Leadership commitment is a hallmark of any successful change management effort. In a 1997 HBR article, John Kotter called this “forming a powerful guiding coalition”, a critical mass to assure that something worthwhile is accomplished. This is a natural outgrowth of the business case and the stakeholder analysis. The “what’s in for the organization” and “what’s in it for me” should be clear at this point. HR leadership plays an important role but the key is building commitment with line managers. As Kotter also said, “No matter how capable or dedicated the staff head, groups without strong line leadership never achieve the power that is required.”
Build A Robust Process. The value map will define the key components of the succession management process. It will also assure that the process always has a strong link to business strategy, another hallmark of a robust process. The most often cited requirement for an effective SM process is a valid and reliable method of assessing talent. I’ve written about the best method to assess talent in detail elsewhere. Suffice to say, the best assessment practices are candid, facilitated, behavior-based team discussions that do not require preparation or paperwork and do not depend solely on a single manager’s assessment.
Build A Differentiated Process. Differentiated in two respects – Not all jobs/roles are the same and not all talent is the same. The SM process should clearly differentiate roles that are pivotal (A Postions) versus those that are enabling (B’s) or business necessity roles (C’s). Pivotal roles generate wealth for the firm and value for customers. They are usually a small percentage of total jobs and often require talent that is a rare commodity. There is also a wide variance in performance – not everyone can do them well. Talent planning for pivotal roles must be spot-on.
The talent assessment process will help distinguish the capability of employees. How employees with different capabilities are handled must also be differentiated. The past CEO and Chairwoman of Xerox, Anne Mulcahy, stated in a 2009 NY Times article that “Not everybody is created equal, and it’s important for companies to identify those high potentials and treat them differently, accelerate their development and pay them more. That process is so incredibly important to developing first-class leadership in a company.” I couldn’t agree with her more.
Build Accountability and Follow Up. You have a clear business case, committed leadership and a robust process that differentiates. That will all be for naught unless talent action plans are created for which managers are held accountable. As a plus, it is very difficult to have candid talent discussions (See Building a Robust Process) and just walk away without discussing ,”OK, now what do we do?” You will have a clear picture of talent strengths and gaps. Now you need to build a prioritized action plan that will significantly improve the talent picture. A 2010 survey by the Institute for Corporate Productivity (I4CP) showed that leaders in high-performing organizations are more likely to have talent specific goals and objectives – your organization should do likewise.
Organizing the talent review results in a talent matrix can help you identify where do you start? Focus on the pivotal positions first. Remove D and E players from those jobs as quick as possible and replace them with A & B Players. Next focus on all the A & B Players. Are they challenged, rewarded and engaged? Are they being developed and for what pivotal roles? How will you keep the C players competitive? And so on.
Build Talent Data Into Business Intelligence. I’ve successfully managed the data that flows from an SM process with spreadsheets. Pivot tables are a great way to slice, dice and filter the data to answer different talent questions, measure the process effectiveness or track progress.
- How many pivotal roles have high potential ready now back-ups?
- How many high potentials have been in there present job more than 3 years or report to managers that are C or D players (red flags).
- What % of pivotal roles were filled from within?
- Has our talent capability significantly improved since last year?
The list could be endless. The value map will help you focus your analysis.
Tracking the SM data in relational, multi-dimensional business intelligence software offers an even more powerful means of analysis. Better yet, there are a host of integrated HRIS/Employee Performance Management/Talent Management software available. It is one of the fastest growing HR Technology tools. My guidance – build the process first and then match the technology to it.