Succession Planning Essay
All around the globe there are two main opinions about talent management. One that states that talent can be developed by itself through the everyday work. On the other hand another school states that a talent must be discovered, nurtured, grow and retained. In the fast growing business world especially in last 2 decades many issues appeared that emphasise on taking a stand whether to follow the evolutionary theory or to follow the succession planning and management. Sometimes a company face a challenge if a key position worker disappears for any reason. For example taken by a head hunter, retirement or death. A place is vacant and to fill this place it would take maybe months. Not mention the amount of knowledge that was lost as this key employee was gone. As the competition increases in the business world there is no more loyalty, both from the company and the employee.
To face those challenges big organisations must develop a plan not just to solve these situations but also to avoid them in the first place. This plan is a complicated process that requires the dedication of everyone involved. Its success can be measured by the people that affects. (Palma, M 2009, ‘Succession Planning’, PA Times (American Society for Public Administration, March, vol.32, iss. 3, pp.10-11). This report aims to explain and both theories from different vintage points. This paper has three sections. The first is the definition of succession planning. The next is examples of the evolutionary theory. The third section is about talent development as a result of sustained efforts to prepare the leaders of tomorrow. At the end I’ll briefly discuss my conclusion and give my recommendation.
2. Why Succession planning
Succession planning has been defined as:
A means of identifying critical management positions, starting at the levels of project manager and supervisor and extending to the highest positions in the organisation. Succession planning also describes management positions to provide maximum flexibility in lateral management moves and to ensure that as individuals achieve greater seniority, their management skills will broaden and become more generalized in relation to total organisational objectives rather than to purely departmental objectives.( Rothwell, W. J., 2010. Effective Succession Planning. Fourth edition ed. New York: AMACOM American Management Association.) Also it is the identification and development of potential successors for key positions in an organisation, through a systematic evaluation process and training.
Unlike replacement planning (which grades an individual solely on the basis of his or her past performance) succession planning is largely predictive in judging an individual for a position he or she might never have been in.( www.businessdictionary.com) It is a component of good HR planning and management. It understands that staff will not be with an organization forever and it provides a plan and process for ameliorating the situation that will occur when they leave. It must not focus on the senior positions only, but also on all the crucial key positions in all levels. Succession planning is a process of developing talent to meet the needs of the organisation now and in the future.
Every time a manager makes a work assignment, he or she is preparing someone for the future because he or she is building that workers ability. Work experience builds competence, and different kinds of work experience build different kinds of competence. (Effective succession planning, William J. Rothwell, 4th edition, p371) Organizational leaders need to think about aligning their staffing and leadership needs with the organization’s future strategic objectives. If they do not take action to establish an effective SP&M program, they are likely to fall victim to the so-called like-me problem, in which people are biased to pick other people like themselves, viewing them more favourably.
Given the tendency to want to “clone” job incumbents for successors, organizations must take steps to counteract that built-in bias, for the simple reason that the job incumbent of today, while perhaps perfectly suited for the business environment now, may not be suitable for the business environment of the future.( Rothwell, W. J., 2010. Effective Succession Planning. Fourth edition ed. New York: AMACOM American Management Association.) 3. The Evolutionary Process of Talent Development:
Here are some examples of real life companies using the evolutionary process: 3.1 Mohamed Ibrahim Optics
This company was established in 1972 and the owner Mr. Mohamed Ibrahim at this time about 35 years old. By 1999 there were more than 25 branches around Egypt. After more than 40 years it’s the time for him to retire because health issues. He has 3 sons and because he was always managing the process he is assuming that one of his sons would be his successor in the business, but neither had he identified which of them would be the best successor, nor he tried to develop them. The emotional factor and the notion that he was going to stay at home and would not be the C-executive terrifying Mr. Ibrahim. Now one of his sons who is not interested in the business is running the operation and the employees are not happy with the new manager which affected their performance. 3.2 Rizkallah appliances
This is an example about a CEO’s maneuvering to delay the succession process. After 2 decades of running Rizkallah for electronics, the time has come for Mr. Essam to start planning for retirement. The board was confident that Mr. Essam was the best one for the position. He has the experience and the knowledge. Putting his retirement plans in one hand and the strategy he want to follow in the other hand made him procrastinate the succession process. He became hypercritical of all potential candidates. Also compare his performance with the performance of the new candidate. For Mr. Essam he was losing his job. The key to successful succession planning is to stop viewing it as a zero-sum game with one winner and one loser. It should be regarded as a natural progression in the health of an organization. (Baldoni, J 2008, ‘Making a Success of Succession Planning’, CIO Insight)
3.3 Masr for insurance
This is about a CEO who would not leave his position due to economic factors. The recession in Egypt make Mustafa think twice about leaving his position. Also the recession made it very difficult to start a systematic succession planning in the organisation. Pulling off a CEO transition is never easy, especially during a recession. (The art of succession, By: Boyle, Matt, BusinessWeek, 5/11/2009, Issue 4130) In his mind he thought that he must be the only decision making person. Holding all the keys for making a decision in his hands.
Regardless he was about 59 years old he never thought of choosing a successor or investing in a succession plan. During the revolution Egypt in 2011 he was exposed to the gases and because of his age and medical condition he could not tolerate the gas and he suffocated to death. More than 6 months passed by and his position was still vacant and no one dare to fill his place. Those 6 months were very tough and the firm missed lots of opportunities as in this period many companies changed their policies to coop with the different situation.
4. Succession planning and management Argument:
From the previous examples we understand that succession planning is needed in any big company. SP&M program is needed so the organisational leaders align their staffing and leadership needs with the organisation’s future strategic objectives. Another reason why SP&M program is needed: More and more organisations are experiencing the effects of aging workforces that are putting them at risk of losing their most experienced workers to retirement. Also terrorism increases the need for SP&M program to ensure that key workers have back up in case they are needed. (Effective succession planning, William J. Rothwell, 4th edition) I Use everything that happens as a learning experience to prepare my staff to stretch in the future.
Everyone takes experiences at a different level; they don’t all derive the same kinds of lessons from those experiences. What I try to do on a daily basis is turn everything into a leadership learning session. (Chief learning officer magazine, The CLO Succession Plan, March 2008 issue) According to Peter F. Drucker: “The question of tomorrow’s management is, above all, a concern of our society. Let me put it bluntly-we have reached a point where we simply will not tolerate as a country, as a society, as a government, the danger that any one of our major companies will decline or collapse because it has not made adequate provisions for management succession.” (Harper W.Moulton and Arthur A. Fickel, Executive Development: Preparing For the 21st Century (New York: Oxford University Press, 1993), p. 29. “Every enterprise is a learning and teaching institution. Training and development must be built into it on all levels—training and development never stop.” – Peter F. Drucker
5. Talent development is a result of a sustained effort to prepare leaders of tomorrow Another good example from a friend of mine who was working as human resource manager in Prizma Securities Company. 5.1 Prizma Securities
In the company they were using a 6 key steps model which used in many large organisations worldwide. They were using market-driven approach to integrate strategic plans with succession plans where necessary talents are required to deal with competitive pressure. 1. Formulating a mission statement: It describes the purpose of a program or the reason for its existence. 2. Identify key areas and positions: Gap analysis may identify key areas. Also Review key positions periodically because they may change over time, depending on changes in Government direction and the introduction of new technology. 3.Identify competency for key areas and positions: Employees who believe they are growing and developing professionally, learning new skills and gaining experience are more productive, have higher morale, and are more loyal than employees at organizations that don’t emphasize talent development and knowledge management (Moskal, Planning for Succession, Baseline, October2008, iss. 89, pp. 12-14.)
This was achieved by assessing knowledge, skills and abilities or competency profile. 4. Find interested employees and —assess them against capabilities: Using Talent review meetings 5.Develop and implement succession and knowledge transfer plans: Using stretch assignments, acting assignments, formal training, mentoring and coaching and Job rotations those procedures would help in transferring of knowledge and not remain with certain people. Effective succession planning and talent retention nurtures those employees responsible for the organization’s future vision, strategy and success. It assures a sequence of qualified, promotable people as the boomers move on. (Moskal, Planning for Succession, Baseline, October2008, iss. 89, pp. 12-14.) 6. Evaluate effectiveness
Evaluation was based on the Donald Kirkpatrick pattern which examines four levels: customer satisfaction, program progress, effective placement and organisational results. Also the programmatic evaluation which examine the process against its stated mission, objectives, and activities.
5.2 Adel Elkholy for shipping:
Adel Elkholy Company is one of the largest companies in Egypt. The total number of workers is about 800 employees. In a meeting with HR manager personally he explained briefly the program for succession he is implementing. The purpose of the program: This step to clarify why the company undergoing this program. So the whole departments could be involved and participate. The measurable objectives of the program: result must be measurable so they can measure the success of the program. Design a Competency model: A competency model was established to link the organisation core competencies to job competencies.
A present competencies identification for success: in this step 2 categories are identified the exemplars and the fully successful performers. The way those competencies are measured: using high technological software. The competencies needed for success in the future: A scenario planning is conducted to discover the competencies needed in the future. The way the organization assesses potential: using empowered individual potential assessment. Classify individuals by performance and potential:
Using the performance/potential 9 grids
Narrowing gaps: Preparing and evaluating individual development plans and activities. Evaluating results: It’s carried out by external consultant. Then the results are presented to the owner of the company. 6. Conclusion
Although about one half of the companies do not have a succession plan as stated in Business Week: Last year, the National Association of Corporate Directors found that 42.4% of companies had no succession plan at all. The economic crisis has exacerbated this problem as resources have diminished. (The Art of Succession. by: Boyle, Matt, BusinessWeek, 5/11/2009, Issue 4130). But this does not mean that succession planning is not important for the survival of the organisation; moreover its importance is increasing year after year. Most of the organisations knew its importance even if they do not apply the plan.
In my opinion, the previous examples show the importance of having a systematic succession planning and management program. That helps placing the right person in the right place at the right time. Having successors is not an easy job, if the SP& Management Program is not aligned with the business strategies & HR strategies; all stockholders are involved, top management giving full support and the use of proper approaches and tools. It became also mandatory than ever for organisations to plan for future leadership and development of all workers at all levels. At the same time, all the activities in the market became more and more complex. Many functions now require extensive skills and knowledge.
For all the previous reasons mentioned in my report supported with real life cases, I strongly recommend leaders to understand that it’s critical to strengthen their talent pool through succession planning, professional development, job rotation and workforce planning. They need to identify potential talent and groom it.
So, they must take proactive steps to plan for talent needs at all levels and implement programs designed to ensure that the right people are available for the right jobs in the right places and at the right time.
1. (A 2009 tune up your firm’s succession planning. Dominic Cingoranelli. Journal of accounting march 2009). 2. (Palma, M 2009, ‘Succession Planning’, PA Times (American Society for Public Administration, March, vol.32, iss. 3, pp.10-11) 3. Rothwell, W. J., 2010. Effective Succession Planning. Fourth edition ed. New York: AMACOM American Management Association. 4. ( www.businessdictionary.com)
5. (Baldoni, J 2008, ‘Making a Success of Succession Planning’, CIO Insight) 6. (The art of succession, By: Boyle, Matt, BusinessWeek, 5/11/2009, Issue 4130) 7. (Chief learning officer magazine, The CLO Succession Plan, March 2008 issue) 8. (Moskal, Planning for Succession, Baseline, October2008, iss. 89, pp. 12-14.) 9. Harper W.Moulton and Arthur A. Fickel, Executive Development: Preparing For the 21st Century (New York: Oxford University Press, 1993), p. 29.