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Succession Planning: Refilling the Pipeline

Written by: Rick Dacri

Article Overview: In the next 3 to 5 years, the first surge of Baby Boomers is expected to exit the workforce. The volume of turnover could be unprecedented and its impact on all organizations will be dramatic. Beyond the loss of people, there will be significant loss of experience, knowledge, perspective and wisdom. This prospect of losing so much talent and knowledge in a short period of time has forced even the most reluctant to take notice and begin focusing on succession planning.

Succession Planning: Refilling the Pipeline

When Jack Welch announced his retirement from GE, there were three replacements waiting in the wings. When McDonald’s Chairman Jim Cantalupo suddenly died, his replacement was literally a heart beat away. In both cases, plans were in place and the transition for the new leader was orderly, with minimal or no impact on the organization.

Not all organizations are ready. Hewlett-Packard had to go outside the company to tap Carly Fiorina from Lucent Technologies to be their CEO, and then weathered six years of trauma, an ugly, public termination and was once again forced to bring in someone from the outside to be their CEO.

GE and McDonald’s exemplified the importance and effectiveness of succession planning. They were ready with an able heir. But one does not have to be a Fortune 500 firm to have a plan—in fact, every organization should be prepared for the inevitable. More and more organizations realize that their success is dependent on a smooth continuity of leadership and the development of home grown talent. But more firms need to get on board. In a recent SHRM survey done with the National Older Worker Career Center, only 29% of the participants reported having succession planning plans. Why aren’t all companies getting on board?

Too often organizations are focused on the crisis in front of them. Making plans for something that will happen in the future does not seem to rise to the level of urgency. It is just easier to defer to another time. For others, the issue hits too close to home. Thinking about their seat and when they will no longer occupy it, makes them feel very uncomfortable. Planning for that time and developing their replacement, makes them feel superfluous. Succession planning sometimes forces them to face their own retirement and brings up lots of issues that many would rather not address at all. It can be painful. And for others, those who may be a bit jaded, succession planning is simply not their problem. As one cynical executive told me, “I’ll be gone, so why should I worry?” While this myopic view may be shared by a small number, it will harm the long range health of their organizations.

In the next 3 to 5 years, the first surge of Baby Boomers is expected to exit the workforce. The volume of turnover could be unprecedented and its impact on all organizations will be dramatic. Beyond the loss of people, there will be significant loss of experience, knowledge, perspective and wisdom. This prospect of losing so much talent and knowledge in a short period of time has forced even the most reluctant to take notice and begin focusing on succession planning.

So what is succession planning? It is a process of identifying and developing talent to ensure that key organizational positions can be filled with qualified internal candidates in advance of their actual need. It is a dynamic process focused on creating pools of talent available to meet the immediate and long term needs of the company.

No longer is succession planning’s focus simply on the executive suite, where the chosen few would scheme and plot before anointing the heir-apparent in a sort of kingmaker game of chess. Today, succession planning is being pushed further down into the organization. By developing more and more levels of the workforce, ready replacements are in place whenever they are needed.

A well developed succession plan should be integrated into the organization’s overall workforce management plan and must be intimately linked to recruitment, retention, training, performance management and knowledge-retention initiatives. After organizations define their short and long-term goals, they can assess whether they have the workforce capabilities to meet these strategic goals. The gap between their current workforce capabilities and what is needed to meet the expected future needs, along with the methods for narrowing this gap, forms the crux of succession planning.

So what are the key elements of a successful plan?
1. Active CEO Involvement: no longer can this be simply an HR plan. More and more CEOs are partnering with HR and actively managing this strategic initiative.
2. Integration with your business plan: succession planning cannot operate in a vacuum while business plans cannot be achieved without talent.
3. Process to identify essential positions and their critical competencies—not all positions need to be part of the plan.
4. Procedure to identify, promote and select “high potentials”—along with this comes a plan for individual career development.
5. Manner to monitor individuals’ development utilizing coaching, mentoring and appraisals—the essentials of a good performance management plan.
6. Method to identify gaps in succession to determine whether one can build internal strength or whether there will be the need to rapidly recruit from the outside.
7. Regular review of the plan to ensure its effectiveness. Succession planning must be ongoing and not an annual look-see.

Unplanned turnover can derail the best laid plans. While the plan is to grow and develop internal talent for future opportunities and needs, things happen and employees leave. Organizations need to put in place strategies to identify potential turnover issues and “at-risk” talent in order to minimize the impact. Employee satisfaction surveys have proven to be an effective predictor of turnover and should be an annual initiative.

While the focus of the plan is to identify and grow talent, one must pay ample attention in preventing valuable knowledge from walking out the door. Organizations must focus on capturing knowledge of employees before they leave or retire. Through “knowledge retention” or “knowledge mapping” plans, managers can capture critical knowledge from their employee’s heads. Common elements of knowledge retention plans include documentation, mentoring, training, shadowing, and expertise sharing. Knowledge retention must become the fabric of an organization. When employees and managers readily share their knowledge, experiences, and expertise, then the operation flows without any blips.

Today we are at a critical juncture. We know that left unchecked, the flow of talent out of the workforce will be steadily increasing. Succession plans can begin to refill the pipeline. Beginning the process does not have to be difficult or complex. But the process must begin. Start slowly—but start before that slow drip becomes a steady stream that leaves your workplace drained.

Related Articles
  Guess What? Succession Planning is not Rocket Science
  Succession Planning - Vital For Your Business At All Levels
  “Do You Know Where Your Succession Plan Is? And Do You Know What To Do If You Can’t Find It?”
  Assessing and Building Your Leadership Pipeline
  Succession planning myths and realities

Article Tags: career center, carly fiorina, ceo, chairman jim, continuity, fortune 500, heir, hewlett packard, jim cantalupo, lucent, lucent technologies, mcdonald, replacements, retirement, shrm survey, six years, succession planning, trauma, urgency, waiting in the wings



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