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While performance expectations for companies are increasing more than ever, talent mobility is also increasing at the same time and pace. Most companies with more than 500 employees have already taken some steps to begin a succession planning process for senior management positions. Yet have they been 100% effective at making sure that the right talent is ready at the right time? One of the key goals of any succession planning effort should be that there is no "hiccup" in seamlessly executing the business plan, at least from a talent perspective.
Here are some lessons we have learned as succession planning practices mature that could be helpful to increase the effectiveness of your company's succession planning efforts.
Lesson #1: Map succession planning as a parallel function to business growth
Without competent leaders in place, the business will struggle to meet goals. Typical organizational growth encompasses four steps to wealth creation:
1. identification of business opportunity
2. market assessment
3. product development
4. commercialization and profitability
The succession planning process for senior leadership positions can be viewed through the same lens by using these similar four steps:
1. identification of potential talent
2. leadership assessment
3. leadership development
4. executive placement and results
By viewing succession planning as an essential critical path to profitability, these organizational values will enhance the chances of leadership readiness.
Lesson #2: Prioritize succession management efforts
In every business, all positions are not created equal. For example, at Nordstrom, customer service positions are king; while at the same time Walmart's competence in IT and supply chain management are paramount. Succession planning priorities should be placed on position criteria such as strategic importance to the current and future business, high potential employees, specialized skills and/or abilities and hard to replace talent.
Prioritizing development efforts will lead to lower performance risks for your business.
Lesson #3: Develop a "pool" of talent vs. matched 1:1 positions
Due to increased worker mobility (most employees stay at a company only 3.5 years today), it is important to conduct talent reviews and select pools of potential successors. An organization may want to have up to four candidates in a pool as potential replacements for a particular senior role, taking into account potential turnover or sudden needed changes to the business direction based on product and
market opportunities. This rule is particularly true for businesses that have a short outlook of less than four years.
Lesson #4: Follow through on the development is more critical than the talent review itself
Beware of the talent review binder that sits on the shelf until the next talent review meeting. Following through with on-the-job development activities for each person in the succession planning talent pool is critical from a readiness standpoint. Identifying owners of each individual development plan, besides the individual him/herself, is necessary for the successful implementation of any succession planning process.
Lesson #5: The importance of having a superior management team and leadership development must be consistently marketed throughout the organization
The CEO and the VP of Human Resources should act in tandem to create an internal marketing communications plan for leadership development that is reviewed and refreshed annually. In addition, actual "teeth" in such a plan can be put in place by only promoting leaders who have a track record of both delivering performance and people development results. It should be clear to everyone working in the organization that development of great leaders is a high priority for the company and that those who don't bother with people development will not be rewarded.
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