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By Vaughan Bowser
Vice-President of Human Resources & Facilities,
Workers' Compensation Board of B.C.
Thanks to the writing of Jim Collins (From Good to Great) and others, corporate executives and Boards of Directors are realizing that one of the best decisions you can make to build a strong management team is not to hire “high fliers” from outside the organization, but to develop and promote your own people. Succession planning is the systematic process of defining what successful leaders need to be doing, both today and tomorrow, and in turn identifying those individuals who show the capacity or potential to assume more responsibility. Both empirical evidence and anecdotal observation have shown beyond question that high-performing companies develop and promote their own employees.
Succession planning pays major dividends for companies that do it right. However, it does not just happen. Organizations too often simply look around when a critical vacancy needs filling and select the last person that really impressed them, or go outside and hire individuals with whom they have worked. Succession planning, to be successful, needs a planned and structured approach.
The Essentials
First and foremost, succession planning requires a commitment that it be a priority for the company, and that each management person in the company be future-focused. From a human resources point of view, this means talent is identified at all levels and developed in a cohesive and structured way. It also means at a minimum, your succession plan should have the following elements:
•CEO & executive support – It must be supported by the entire senior team; this is the number one predictor of success (or “reason for failure” where it does not succeed) of succession planning.
•Ownership by line management and supported and understood by staff
•Simple and tailored to your organization’s needs
•Future-oriented and linked to your strategic business plans and culture
•Part of an overall Human Resources strategic planning process
•Linked to and integrated with other Human Resources initiatives
From a best practices point of view, it is important that your assessment of leadership competencies is based on well-developed position competencies and an objective assessment of candidates. Rather than using the outdated concept of “charisma,” leadership should be based on true leadership qualities such as ability to drive results or emotional intelligence qualities like self-insight, humility and mental flexibility. To quote Kouze and Pozner, “Leaders establish and maintain their credibility by their actions….When at their best, leaders: challenge the process, inspire a shared vision, enable others to act, model the way, and encourage the heart.”
Much of the current research, specifically from sources such as Gallup and Jim Collins, shows that organizations should be identifying and targeting individuals with talent. This means you look at both current performance and future potential when assessing candidates. As every HR person and experienced line manager knows (sometimes with the scars to prove it), the greatest mistake an organization can make is to simply promote someone based on how good they are in their current job. There are countless failed managers out there who were promoted because they were the best at the work they were doing in the mistaken belief that that will predict success as a manager. It’s an entirely different job, and your assessment must look at their potential, not simply where they are now.
Some Thoughts and Tough Questions
Your best and brightest are among your most valuable corporate assets, and they deserve time, attention and an opportunity to grow. A key point of a succession planning process is that candidates need to be “readied” for their next opportunity. This is a two-way street and requires that individuals also take responsibility for their personal and professional growth. The mode and process, however, are neither static nor etched in stone. Success factors will change over time as the organization changes and evolves; identified talent may fail to materialize while new up-and-comers come into view.
Having been through the process on many occasions, we can observe that the process helps raise the bar on talent by providing a clean and objective picture to senior management of real bench strength. It also brings into focus their shared responsibility for building depth and supporting the best use of your human capital.
There are some difficult choices and standards that you must make decisions about before embarking on a successful succession planning process. Included in these are the following:
•To tell or not to tell. Will you tell those identified as potential successors that they are on the list? Or the order of the list? The risk is that those on the list believe they are “shoe-ins,” while those who are not listed believe the company does not want them.
•Are you evaluating the results? This goes with the reality that it must be an active process that is monitored and flexes with organizational and people changes.
•Have you truly looked at cross-functional assignments or promotions? If your up-and-comers are only moving up one line of business, you’re probably not doing them, or you, a favor.
•Most importantly, what have you (as an individual and a company) done in the last 12 months to develop and coach your highest-potential employees?
Succession planning does take a fair amount of planning and energy. However, virtually every study that examines successful companies concludes that planning and developing your management strength pays off. As Sam Walton states, “Outstanding leaders go out of the way to boost the self-esteem of their personnel. If people believe in themselves, it's amazing what they can accomplish.”
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