When Bill Gates announced his retirement plans in June this year, the first question in everybody's mind was - who would be his successor? Fortunately, Gates did not have just one, but two able men he could eventually transfer his responsibilities to. But for most others, designating or grooming a successor doesn't happen until the eleventh hour.
Much as organisations realise that it's time to incorporate succession planning as part of the strategic plan, the question still remains - should one wait for the opening to appear before promoting a potential talent, or should employers make opportunities for each employee as they grow and develop so that you can keep them, challenged, engaged and motivated, and not lose them to your competitors?
In today's fast growing markets, the only way to keep talented people, says Tan Yen Yen, managing director, Hewlett-Packard (HP) Singapore, is to provide them with growth opportunities that keep them stretched and finding more promising opportunities than they might find elsewhere. Agreeing that succession planning at all levels is increasingly a strategic business imperative, especially for businesses that aim to attain or retain their sustainability and competitive edge, she is emphatic. "It is a vital resource in anticipating the future needs of the organisation; it helps find, assess, develop, and monitor the human capital required to implement by the organisation's short-term and long-term strategy."
Finding a successor
While a rapidly changing business climate demands that employers should be ready to accept people who want to move on, (whether internally or externally), employers must also, at the same time, understand that companies need to be able to identify relevant and appropriate replacements. "If not, you can't run your business on a continuously stable platform," F X Laubscher, president, ZF South East Asia, cautions.
Easier said than done! Interestingly, sometimes the resistance doesn't come so much from external forces but from the potential talent themselves. "One of the greatest challenges ZF faces is convincing potential leaders that they have the talent and traits to succeed and take their careers to a higher level," Laubscher says. "We combat this challenge by taking time to empower them through nurturing, coaching and convincing them of their capabilities. We ensure they are given the tools required for taking on more responsibilities and tackling different management situations."
Although it sounds clichéd, it is important to note here that one size doesn't fit all. There are different approaches that may be used, depending on the situation of the company in question. In some cases, an organisation may need to move some people quickly, to expose them to a wide gamut of experiences and training in order to fill vacancies. Others may follow a process of strategic planning, depending on the individual's capabilities and competencies. But, in a nutshell, as an employer, you first need to understand the long-term direction of your company, and then develop and devise a strategic plan for succession management.
Building the pipeline
Though virtually every key position and key person in your organisation is therefore a candidate for a succession plan, an understanding the talent requirements of the organisation cannot be overstated. You, the employer, must know the key areas which require continuity and development of human capital within your company. Also, who these key people are!
Beyond that, it is necessary to understand whether the concept of succession planning aligns to your business strategies and talent management programs. For example, Tan declares HP's talent management initiatives, aligned with its career development programs, have been instrumental in its ability to attain "an impressive record in employee retention" and develop a leadership pipeline. Some 60% of HP's employees have been with the company for over five years, a lower attrition rate than the average industry standard..
This 'Winning Edge' talent strategy is designed to accelerate the career development of selected middle managers and senior executives, and to build the talent pool of managers with the potential to become future executives or successors. The program is for selected high potential middle managers who are currently in a role where they manage managers. Candidates are nominated by their managers and sponsored by their business organisations.
"The program includes workshops, professional coaching and mentoring, and managing strategic projects sponsored by HP executives. It is also a key component of HP's diversity strategy, which aims to increase the number of women and minorities in management positions," she says.
Mentoring is crucial in retention, employee motivation, and succession planning, Tan believes. At HP, some of these mentorship programs are employee-initiated, aiming to "foster employees' professional development, communication, personal growth, and personal health." HP employees across the globe can participate in specific mentoring programs, including Employee Network Groups; Finance Mentoring; Engineering Services and TCE Mentoring; Disability Mentoring; and Women's Mentoring.
Business and function managers make use of the 'Winning Edge' system to identify and develop high-performing, high-potential talent in order to ensure the company has both current and future leaders at appropriate levels of the organisation. "This is supported by the talent management system described above, which can identify at least three successors for every job role to ensure that we have a healthy succession pipeline," Tan reveals.
Similarly, at ZF, training, both technical and business, is provided constantly for employees at all levels, Laubscher says. "We identify employees who exhibit the traits and talents ideal for leadership roles, and then we empower them so they are able to deal with the responsibilities, realities and accountabilities they can face in leadership roles."
Yes...but for how long?
Realistically speaking, succession planning is never finished. It is an ongoing process. Much as it is important to identify mission critical positions for both management and technical portfolios, once that is done, it is necessary to determine who the talents are, so they can be groomed for the positions identified. Organisations need to ensure that there is a structured framework, process and program in place to develop and manage these talents and high potentials consistently, for both short-term and long-term.
While learning and development opportunities and career development opportunities - which include job rotations, special assignments and such - are ideal for short-term planning, career and succession planning, development of high potentials, mentoring programs, and overseas exposure are the right approaches to long-term planning. Experts also suggest the optimisation rate of the resources should be reviewed on a regular basis.
But the process of succession planning is time consuming, and requires close monitoring of the performance and progress of each and every talent identified, Ann Chua, director-HR, NCS Singapore, cautions.
"There must also be strong management support and commitment at all times," she stresses, and that one has to be particularly careful about crossing entity differences in people strategies, "maintaining consistencies in selection and assessment despite the dynamism of the business and maintaining the size of the talent pool." To cope with the challenges, she recommends effective two-way communication with the management team.
"Constant and timely update of the talents' performance should be provided. This can take the form of regular meetings and/or a written report. In addition, clear standards should be set in the selection and assessment criteria. Develop a pool of mentors to participate in the process; ensure common understanding and expectation of future talents; and ensure that they do not deviate from the organisation's objectives," she says.
In a nutshell
Succession planning really requires a clear people strategy that is aligned with your business needs. As NCS' Chua suggests, you must "ensure that there is a simple and effective system and process in place which all managers understand and know how to use. Also, there must be effective communication at all times, as a lack of it could well lead to misinterpretation."
In the end, HR practitioners should not underestimate the critical role succession planning plays in the overall success of the company, effectively linking it to the company's overall business strategy. Hence, succession planning should be a cyclical and integral corporate process.
Making it work, however, requires a high degree of commitment, especially from top executives, divisional HR staff, and succession management specialists. Further, as HP's Tan concludes, "HR practitioners should capitalise on the use of technology to make the succession planning process shorter, simpler, more flexible and effective. But as organisations adapt to changing business environments, they should continue to enhance their respective succession planning processes." HRM