19 Apr Succession Management is Bigger Than a New CEO
There are few concepts in business as misunderstood as succession management. For a lot of companies, succession management is an annual event that often happens behind closed doors. The process itself lacks transparency and employees often lack important information about the outcomes. In the absence of clarity, team members tend to form their own conclusions.
A common misconception about succession management is that it’s a quick fix or a process that happens once per year or on the heels of a change in leadership. Some people understandably believe it’s replacement planning. However, succession management is far more detailed and far more comprehensive than picking a single leader. It also deserves regular and significant focus and attention.
Legendary business executive Jack Welch said, “Talent management deserves as much focus as financial capital management in corporations.”
Simply put, succession management identifies the talent needed for a particular business or organization, examines the existing talent supply, identifies gaps in needs and supply, and then maps a plan to ensure the organization has a system in place to get and keep the people it needs. It is a strategy to ensure:
1. A pipeline of qualified candidates for executive roles.
2. Transparency around individual career trajectories.
3. Staff have mentors to support their success.
4. A system to retain historical knowledge.
When done effectively, succession management is a series of conversations up and down the management chain. It is not a quick fix or a process that can happen in a month or less. It is a long-term commitment to ensure specific leadership development outcomes. Succession management is an ongoing conversation or dialogue.
To implement a strong succession management plan, companies must ensure the plan is:
1. Aligned with the company’s strategic direction.
2. Integrated into current leadership development.
3. Embedded in the management and operational planning for the business.
Here’s why aligned, integrated, and embedded plans matter:
Aligned. Unless leaders are clear about the strategic direction of a company, they cannot align their people with their business needs. They also can’t recruit and develop staff for the future without a clear understanding of what the future will look like. An organization was anticipating launching an online training project that would account for 30 percent of its revenue in five years. Through its workforce planning and succession management efforts, the company was able to ensure its existing and future staff were trained and prepared for the company’s impending product expansion.
Integrated. Succession management must be integrated into the current leadership development plans. The person’s manager and possibly the manager’s manager must understand employees’ professional development needs so they can help ensure those needs are met and incorporated as part of the staffers’ workplans. When professional development plans are discussed in this light, as opposed to a deficiency perspective, employees are motivated and excited about their future with the organization.
Embedded. Succession management must be embedded in management and operational planning for the business. Unless there is clarity on the gap between the talent that is needed and the supply of talent, operational planning is insufficient. Once there is an assessment of the talent an organization needs, the operational team can budget resources and time to acquire what’s missing.
By having a realistic understanding of what succession management is and is not, companies are better able to design processes that support their long-term success. They’re also able to create visible roles and opportunities for their teams that align with the strategic direction. This is a win-win for employees and managers alike, since turnover rises when employees don’t see a path for professional growth and development.
In the end, succession management is broader than selecting a new chief executive. It’s about ensuring the process produces the leaders a company needs to take the business where executives and stakeholders want it to go. When done correctly, it also boosts morale by offering transparency about individual career trajectories.
This article was originally published on SHRM Executive Network – HR People + Strategy. Read more here.