Why Succession Planning?
Written by MJ Nama
Last October 18, 2017, I attended a very interesting breakfast forum organized by John Clements Consultants. I found the gathering very fruitful since the speaker, Mr. Graham Hitchmough, shared key insights and valuable lessons on succession planning.
Many of us are familiar with the term “succession planning”, but what does it really mean? As explained by Graham, strategic succession planning is the process (and activities) a company initiates for successors. Since these emerging leaders are corporate assets, succession planning offers a greater success rate in retaining these key talents.
Effective strategic succession planning is a competitive advantage for any organization. In essence, it dramatically increases the “line of sight” for eligible and qualified successors who have developed or could develop capabilities aligned with business priorities. This process enables them to assume critical leadership roles within the company once the need arises.
Today’s fast-changing world increases the pressure on organizations’ leaders through new players, disruptive technologies, diverse workforce, skills shortages, customer loyalty, brand reputation, community impacts, and greater shareholder involvement. Graham emphasized that this strategy enables an organization to sustain business performance and peruse strategic goals, while retaining its unique culture and values.
As a critical part of business continuity planning, this strategic process facilitates a constant review of the key competencies required of leaders, which helps organizations identify and retain key players. While top management and board members are the ones involved in this critical aspect of business planning, HR still has an important role to play.
During the forum, Graham shared a checklist of essential factors that should be considered in strategic succession planning. Aside from involving top executives in the process, each organization must be clear about the competencies they would need for the coming years and continuously develop new competency models. People involved must also come up with a career roadmap for critical roles, as well as develop a plan and risk assessment. In principle, organizations without successors are high-risk, while organizations with only one successor are mid-risk, and those with two or more successors are low-risk. However, being low-risk does not mean you should be complacent; you should set the right mood and create a healthy competition among successors.
It should also be noted that advancement and promotion should not be based on gut feel or instinct. As mentioned earlier, it should be a collaborative effort among executives, top management, and all areas of HR — talent acquisition, recruitment, talent management, compensation and benefits, and leadership development. Additionally, organizations or people involved in the succession planning process must always weigh the pros and cons. Pros — it ensures business continuity and, by choosing only the best of the best, these emerging leaders will push themselves to do their best. Cons — however, the competition might become unhealthy, so management needs to plan for those successors-in-line who would not be promoted.
Before he ended his talk, Graham shared his predictions on the challenges leadership might face within the next five to ten years: dramatically changing competencies; the fourth industrial revolution —technology, digitalization, automation, artificial intelligence, and disruptive innovation; and changing online customer behaviors.
Just a last food for thought — most organizations may already have something in place for these kinds of processes; however, 95% of organizations are ineffective when it comes to follow-through on action plans. In order to achieve business continuity, it is important to pair your strategic succession plan with people who have the right experiences, skills, and capabilities, at the right time.
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About the author:
MJ Nama is a supervising business development consultant under the Leadership Development and Transformation practice in partnership with Zenger Folkman. Prior to this, she was a recruitment consultant at StaffBuilders Asia, a division of John Clements Consultants. She graduated at the University of the East with a Bachelor of Science degree in Psychology. MJ also works as a part-time TV Host at TV5.