Definition: Succession planning refers to the process or strategy through which an organization identifies and develops candidates competent to take up the leadership and other positions that the present occupants will vacate in the future due to expected or unexpected reasons like retirement, relocation to other companies, incapacitation, death, etc. These potential replacements can be identified either internally or externally.
Once the candidates are identified and recruited (if not already working in the organization), an effective succession planning program should continuously train and develop these potential replacements. It even ensures that candidates are equipped with all the necessary skillsets needed for the positions they are being groomed.
Content: Succession Planning
Succession Planning Process
Succession planning is usually a long dynamic process that should be constantly reviewed according to organizational aims or objectives. It involves 6 basic steps as stated below:
- Identify critical positions that may require future replacements.
- Assess and evaluate the capabilities of internal and external candidates.
- Scrutinize the most suitable ones out of all the candidates.
- Recruit (if external) and commence continuous training and development of appropriate employees.
- Determine the best match of each candidate with the job position they deserve.
- Evaluate the cycle periodically according to your company’s objectives.
Leadership Succession Models
A leadership succession model provides a pathway and contributes to the company’s human resource planning efforts. It guides the management to frame strategies for identification, development, promotion and retention of deserving internal resource.
Some of the widely used leadership succession models are discussed below:
Leadership Pipeline Model
The leadership pipeline model is usually associated with the book “Leadership Pipeline” published in 2000 by Ram Charan, Stephen Drotter, and James Noel. However, the above authors merely extended the work of Walter Mahler as captured in Mahler’s 1970 paper titled “Critical Career Crossroads“.
Mahler was a respected human resource consultant and teacher at General Electric who was involved in GE’s succession planning process, including assessing young leaders in the company in the 1970s.
Based on his work experiences at GE and other organizations, Mahler noted that:
- Job demands differ significantly at various leadership levels. These diverse job requirements also call for varied skills.
- There are also varying levels of success among the leaders, with some growing more than others. The leaders with tremendous success exhibited incredible skills at every level while ascending the leadership hierarchy.
- Leaders with colossal success quickly adapted psychologically to the demands of each new role or level, e.g., by identifying areas that required more attention as well as ensuring optimal time management.
- To succeed, a leader must alter his/her values to appreciate the demands of each new role rather than continue to work as if he/she was still in the old position.
After the publish of Mahler’s paper, his model was implemented in more than 80 firms all over the US.
Lynn’s Leadership Succession Planning in Public Sector Organizations
Dahlia Bradshaw Lynn’s cyclical model was put forward in her 2001 article titled “Succession Management Strategies in Public Sector Organizations: Building Leadership Capital.”
According to her, the leadership succession process begins with an analysis or assessment of the organization’s strategies regarding the degree of success achieved to attain the organization’s vision. This makes it possible for a leader to emerge based on the organization’s needs instead of just his/her capabilities. After this, tentative candidates are identified based on the job analysis of various positions.
The identified candidates are then put through a developmental training process to equip them with leadership and other necessary skills. Then they are constantly assessed and evaluated to determine the most suitable candidate for each position.
The last stage is to indulge in outcome assessment and planning to help ascertain how effective the recruitment and selection process was. Everything learned from the procedure helps formulating future organizational assessment strategies, which are partly approved by the leader and his or her top managers. All decisions are subject to revision whenever another leadership identification and selection process is due.
Burkes’s Business-Oriented Succession Planning Model
In his 2003 paper “Succession planning for small to medium-sized family businesses: A succession planning model,” Fred Burke prescribed five principal stages in the succession planning process. These are:
Step 1: Business case for proactive succession planning
Here, the entrepreneur is expected to construct a business plan or case that incorporates succession planning. All the aspects of the program should be analyzed to develop a realistic strategy for succession planning. The plan should undergo annual reviews and modified if necessary to always be aligned with the long-term vision and values of the organization’s ownership.
Step 2: Identification of target roles and positions
In this stage, the main objective is to identify the workforce’s critical segments and assess the key positions needed to meet pre-determined business targets for each step of the business plan. Identification should create roles for people and be based on analyzing and setting priorities for these positions to drive business growth.
Step 3: Determination of core competencies and skills
When all positions have been identified, core competencies and skillsets needed for succeeding in the target roles must be determined. Such core competencies and skillsets will act as barometers for performance assessment. Also, it helps to identify capabilities and skill gaps within the current workforce, thus serve as a framework for employing the talent required to attain the company’s strategic goals and objectives.
Step 4: Assessment of successor candidates
This stage is about designing and implementing a rigorous, competency-based performance management process that will help identify suitable candidates within the organization. Should the internal candidates lack the needed competencies, it may be necessary to seek external candidates via a reliable and fair selection process.
Step 5: Leadership developmental programs
A review of existing and other necessary training and development policies is conducted in the fifth and last stage. This is meant to ensure that potential successors are being trained accordingly. Also, it helps to enable the identified successor to experience diverse cultures, values, new mentors and innovative ideas that he/she will eventually integrate into the company.
Groves’ Leadership Development and Succession Planning Model
Kevin Groves’ model aims to find a nexus between leadership development and the succession planning process. His views are articulated in a paper titled “Integrating leadership development and succession planning best practices.” It provides four steps to guide management’s succession plans.
In the first step, a mentoring relationship is developed between top management (mentors) and other staff (mentees). This is to enable the mentors to identify high potentials among the mentees.
The second step involves putting the identified candidates through a sustained career planning program that will help polish their strengths and improve their weaknesses.
Third comes a leadership competency development program for the potential leader to provide him or her with the skillset and experiences necessary for leading.
Note that there is a feedback mechanism between the above two steps to ensure that leadership development procedures become organizational culture rather than simply finding future leaders.
The final step is selecting an ideal candidate to lead the organization by the upper management.
McKinsey & Company
In 2009, Dominic Barton was elected the Managing Partner at McKinsey & Company, a global management consulting firm founded in 1926. The company’s leadership succession program culminates in the election of a worldwide managing partner by more than 600 senior partners every three years. According to him, the incumbent managing partner must ensure that a group of candidates from among which a leader emerges every three years.
This is achieved by providing the identified candidates with leadership roles from which they’ll be assessed and evaluated. Barton himself was identified as a likely successor in 2003. He was subsequently moved from being the head of the Korea office to head the whole Asian region by the then incumbent leader, Ian Davies. This was meant to prepare Barton for the more significant task of handling the organization globally.
Prior to stepping aside as Apple CEO, Steve Jobs had already crafted a succession plan and integrated it into Apple University, which he established in 2008. Part of the university’s leadership curriculum is based on Job’s experiences and aims to teach Apple workers how to think like Jobs and make decisions they would make. This is an excellent example of how companies can deploy technology to articulate their leadership succession programs.
Apart from Apple University, Steve Jobs personally groomed Tim Cook, his eventual successor, for the position of CEO by providing him with various leadership opportunities to equip him with the skills and experiences needed for the topmost Job.
Importance of succession planning
It becomes quite evident with the above examples that a company with intensive succession planning can become a market leader. Let us discuss its various other benefits:
- Succession planning helps the human resource departments in determining the companies’ future course of action.
- It assists companies to identify their most suitable future leaders and managers.
- Succession planning helps to eliminate the uncertainty or risks associated with expected and unexpected changes in leadership and top-level positions.
- When a leader emerges internally, succession planning saves the resources a company would spend to hire leaders externally.
- A well-articulated succession plan can help attract investors who will be sure that leadership problems will not arise in the company in the future.
- It can motivate workers who realize they may be rewarded with leadership positions if they work hard.
- Identifying talented staff for future leadership positions can help companies prevent them from being tempted to move to other companies.
Succession Planning Disadvantages
When succession planning is widely adopted by companies as a strategic practice, it possess following drawbacks:
- Bias and personal sentiment can negatively affect the succession planning process.
- May breed jealously and loss of motivation among those not selected for leadership positions.
- The selection of an inappropriate candidate can harm organizational performance.
- Some workers who failed in specific earlier tasks may not be considered for selection even when they’ve become better due to those failures.
Succession planning is essential for the strategic human resource management function. It helps organizations identify pools of talent from which future leaders and managers can be selected. This makes it possible to operate smoothly and achieve organizational goals.
The leadership and upper management hierarchy is a vital component of all organizations. This is primarily because of their role as decision-makers in terms of the everyday operations of such organizations. Therefore, leadership and management succession or replacement is one every company will answer sooner or later.