Perhaps the best way of addressing the importance of succession planning is to ask managers, 'How do you expect to carry on your family name, if you don't have offspring?' This by all accounts forces the point home. However, traditionally, busy corporate executives are not known for worrying about a potential crisis that may be 'years off'.
After all, succession planning has happened naturally for decades without strategies and formal programs. But what this naïve or even irresponsible mindset misses, is that we live in a different world than before - a competitive, cost-centric and brutal business environment that highlights good succession planning as a differentiator and strategy for business advantage. What's more, the business environment is likely to continue heading that way.
The role of proper mentoring
Roger Collantes is the managing director of I-LEAD, Citibank's leadership training institute in Shanghai. Collantes is also vice president for learning and development, and a highly experienced corporate mentor and coach. He believes there is no element of succession planning of greater importance than the role of formal guidance, and mentoring is molding the next generation of leaders. The next generation expects quality mentoring too. "Creating elaborate succession layers and grooming 'leaders-in-waiting' are no longer popular and practical today - in times of economic crisis, new opportunities to consolidate or streamline the organisation may mean modifying or redesigning the existing succession planning framework. This is not to say that there is no role for proper mentoring of young executives. In fact this is vital. Mentoring and coaching allows current leadership to identify weaker areas in potential leadership and address those areas that the mentee wants to work on."
General manager of group human resources at Singapore retail giant Robinsons, Chee Nian Tze, agrees, adding that mentoring is critical to providing young leaders with all-important people skills. "The new generation of leaders will be better educated and will often come with good technical skills and knowledge. What they may not possess may be soft skills such as people management skills and interpersonal skills which can't be taught by text books. Mentoring and coaching will be important in helping the future leaders to master these critical skills." Bowne International, like many large multinational organisations, is also an advocate of mentoring. Human resources manager for Asia, Katherine Wu adds that mentoring must be entrenched in the corporate culture to be effective. Bowne identifies high potential employees early and grooms them through mentoring by their managers, and leadership training programs. "In addition, we build it into our culture that each high potential's important mentoring process and career path is paved by themselves."
A firm plan
For steadfast succession planning, leadership development must be based on clearly-defined core competencies or 'critical success factors' that are relevant to the business and organisational realities. Collantes, a global expert in leadership development, argues that leaders must understand the critical competencies that they need to possess in order to succeed within the organisation. Learning and development programs must consistently focus and reinforce these competencies in all 'training interventions'. He also says that it is important for leadership development to be linked with and leveraged with all the other HR and people systems to work effectively. "Having a strong development program in place along with good quality leadership mentoring is critical. This is the organisation putting its money where its mouth is. Once the core leadership competencies have been identified and targeted for development, they must be reinforced and reflected in the organisation's recruitment and selection process, on-boarding and orientation, performance management system, rewards and recognition system, learning and development process."
The state of play - succession planning challenges
All HR experts agree that the major succession planning concern facing them is encouraging high potential employees to take their leadership development more seriously, especially considering their demanding schedules. Finding the focus to work on development areas for high potential employees and making sure they follow through on the program are all constant challenges, says Wu. "Encouraging managers and high potential employees to commit time and energy to the succession planning program, thereby making it a priority, is a challenge." Lack of focus - not just from young, high-potential employees, but actually from the top - on succession planning is an added concern for Chee. "The impact that a lack of succession planning makes is often not immediately felt." Her other issues include the fact that some employees see talk of succession planning as a potential threat to the security of their jobs, and also that some identified successors may not have the patience to wait for their move within the organisation. Other factors can, however, work in favour of the organisation: "The high potentials in the organisation know that they're able to get to a more senior position in their organisation and need not look out for other such opportunities," adds Chee.
One great realisation amongst those in charge of succession plans is that such a strategy depends on so many variables, since the planning is not about moving into a leadership role as it stands today, but trying to predict how that role will look and what competencies are needed for that role tomorrow. This is a real challenge, says BK Asiapac's (Burger King) HR director, Jane Mahony, and one which demands that potential leaders today must at least have the skills of adaptability and flexibility. "If we look at our growth over the next five to ten years, it's not just about potentially moving into your boss' role; it's about growing individuals to be ready to step up to the potential challenges that are ahead of them." This will mean that Burger King has to be ready for both existing roles expanding as well as new roles arising in the structure. "One of our greatest challenges is that we're running at such a high speed in an environment of competing priorities coupled with our lean structure, so we need to ensure that we invest in our people to fuel this future growth. All parties have to play their part."
Retention first
As always, HR can do its bit for promoting succession planning in the business and encouraging leadership to recognise the seriousness of what is without doubt the primary future planning issue on the company's agenda. "To begin with, HR needs to have an in-depth understanding of the business and also needs to be involved in business planning at the top level," says Chee. "Therefore, HR knows the kind of talent that the organisation will require, the timeline and volume required." She adds that HR must be able to help create an organisational climate that is conducive to leadership building.
There is no point developing leaders for your competitor's benefit. If HR and management places high value in developing talent, they have to place similar investment in talent retention, says Mahony, "Retention is the whole process behind succession planning - it's development and career mapping. As we know in Singapore, good pay may draw talent but it's development and career opportunities that retain people." Being a global company, Burger King can offer all the typical incentives for talent retention, such as geographic mobility, robust L&D, and good career promotion opportunities, and enjoys, according to Mahony, high morale.
Wu agrees that personal and career development is the fundamental tool to keeping employees engaged. She underlines an obvious but often overlooked principle that retention is crucial for succession planning. "When a company is willing to invest in people's talents and value their staff's contribution, the staff develops along with the company. These are the people that an organisation needs to develop as its leaders; those people that have grown up with it."
Perhaps it is fair to say that career development (including the all-important mentoring programs), L&D and a general culture of respect for employees' contributions and careers (retention-based mechanisms) is inextricably tied to succession planning. You really cannot have one without the other, concludes Collantes. He says that, "leadership development must follow an integrated and multi-dimensional approach. It shouldn't end at attending a few landmark leadership courses or participating in a multi-layer succession planning exercise. It must integrate the 3 Es of leadership development: Education, Exposure and Experience. Good leadership development is both a key retention tool and a vital form of succession planning."