Discussing the elements of organizational success is so important to me that, as we begin, I want to frame this article by challenging you to think with me for a moment about your business today and your business on March 16, 2018...5 years from now. What is your business going to be like? Will your products and services be the same as they are today or will they change? Will you be serving the same customer base? What is the marketplace going to look like? Will there be the same demand? What type of employees will you need to realize your plans and objectives?
The foundation of your success could hinge upon an effective talent management program that strongly values succession planning.
Because the change process in the business world has become so dramatic, here's the challenge to management professionals: if you're not sure what products or services you'll be selling, how will you know for sure how many staff members you'll need to do the work? Will you need more operations centers or plants? Do you foresee expanding into new territories, or consolidating into key regional markets?
For just a moment, think back to where you were in early 2007. Six years ago the Dow Jones stood at a healthy 12,700. At that same time, the national unemployment rate hovered around 4.5 percent.
Of course few people could have predicted the turmoil that ensued, and even if they did, who would have believed them?
Wharton professor, Dr. Peter Cappelli, has said that "Companies cannot eliminate unpredictability... They can only contain it." There is considerable wisdom in those few words that can be applied to many areas of business, including talent management and succession planning.
Succession: Where is your company today?
Those companies without succession plans tend to operate from a crisis mode, "winging" it. As they gain greater awareness, they move through the stages below towards the ultimate goal of operating within a true talent management system.
1. Crisis Mode
- Single position focus
- Address immediate needs
- Recruit from the outside
2. Replacement Planning
- Key positions
- Replacement plans
- Plans to fill gaps through recruitment and rotation
3. Succession Planning
- Key people
- Identification of high potentials (leadership track)
- Identification of high pros
- Assessment, gap identification, gap closure program or experience
4. Talent Management
- Talent pools for pivotal roles
- Regular talent reviews
- Planned and managed experiences and assignments
- Specialized development programs
When business exploded in the 1950s following World War II, most operated within clear hierarchies that provided defined career paths for their employees. There was comfort and predictability in that model which carried on for decades, but began to change in the 1990s (likely due in part to Hammer and Champy's landmark book, Reengineering the Corporation). Especially today, that "classic" traditional model of succession planning from the 1950s no longer works. The era of deep, detailed talent pipelines with defined career paths and formal succession management plans no longer fit today's reality.
Here's a scary stat regarding succession planning: According to findings from a study published in Public Personnel Management by Gilbert Johnson and Judith Brown, two-thirds of US employers do no planning for their talent needs. If you work in one of these organizations, I hope you'll be inspired to take a proactive approach to succession planning.
"He's just not ready yet."
Have you ever been faced with having to fill a role from the outside because your best internal prospects aren't yet ready to be promoted? A colleague of mine related how a client of his was in this situation and came to the realization that she would "hire one and lose two." Feeling slighted and frustrated that they would now have to wait even longer to move up the ranks if the outside new hire proved successful, the two internal incumbents will look "over the fence for greener pastures" with your competitors. Perhaps this could have been avoided if succession planning and talent development had been more effective sooner.
If you foresee this possibility and want to retain those high potentials, talk to them proactively to soften the blow and look for ways to try to keep them interested and engaged.
But remember that effective talent management and succession plans don't mean that you develop your people for the heck of it. As Dr. Peter Cappelli says, "the goal of talent management isn't to develop people. It is to help your organization make money."
Before you can begin to successfully tackle succession planning, you first need to know what your organization's leaders believe about the following:
- Performance - What does successful performance look like at all levels of the organization?
- Potential - How do we measure potential?
- Development - How does development differ from training?
- Leadership - What does it mean to be a leader?
- Accountability - Do we hold people responsible for meeting goals and deadlines?
- Courageousness - Are your leaders courageous enough to speak up and not hold back?
- Talent - How do we define what true talent is? What percent of our workforce are truly talented? How much would it hurt if these people left?
Starting a healthy dialogue regarding each of these areas is a critical first step. Hopefully, senior management can reach a consensus on what these terms mean for your business and then move towards a viable plan.
If there's a lack of agreement or commitment, the plan will be fractured and ineffective, in which case you'll likely stay in Crisis Mode rather than enjoy the benefits of a true Talent Management approach.