Succession Planning – Is Your Bench Ready to Step Up?
This week’s post is about succession planning, a critical issue affecting companies in all industries. For our upcoming TPP Profitability Seminar in December, we are pleased to have Spencer Tenney of the Tenney Group will be presenting ‘7 Best Practices for Succession Planning”.
Scenario #1 – It’s a sunny afternoon, and you are sitting in your office working on a presentation for one of your major customers that you are meeting next week regarding some new lanes. The phone rings, you answer it and it’s a state trooper. Your national accounts salesperson has just been in a horrific accident on the Interstate, and is being airlifted to the hospital. The trooper asks for family contacts as it’s not looking good. As you go through your contact list you get a nasty feeling in your stomach. You were going to be meeting with Jody later today to go over strategy and review some data that she got from the customer this morning. She has been hands-on with this customer, and has a lot of information that no one else has.
Scenario #2 – You are about to board a plane to come home from meeting another of your important customers when your VP of Operations calls you. Joe, your Operations Director for the West Coast got into another argument with the VP and has just quit with no notice. One of your seasonal customers has just started to ramp up production, and Joe was handling the rental and staging of the specialized trailers needed to service them. Joe was an “off the cuff” sort of guy, and none of his ‘plan’ was written down.
Both of these scenarios are exaggerated, but they do represent real and persistent risks that all businesses face – what to do if a key employee leaves, or is incapacitated? Who would you move into their place? What training would they need? What information gaps will result?
Succession Planning is a strategy that you have in place for when employees leave or retire. This plan looks at both expected and unexpected departures, and the aim is to ensure that no significant expertise or leadership is lost upon their departure. A key aspect of the plan is to identify high-potential employees, who appear to be a good fit for grooming into a leadership role. A second key aspect is a training and mentoring plan to evaluate and nuture their skills so that an easy transition can occur when needed.
For your less senior employees, a succession plan offers them an excellent professional development plan, that will enable them to learn and grow with your organization as they train for future roles. By bringing these new faces into the management realm, you will bring in a new set of experiences and perspectives into the decision making process. This diversification helps your company set itself up for further growth.
There are a number of frameworks available to assist in creating a succession plan, but Teala Wilson of Saba Software has proposed one of the more flexible ones:
- Establish measureable goals to guide the succession planning program. Make sure that these measurements are aligned with the organization’s strategic goals.
- Re-calibrate succession planning program goals on an annual basis. This allows for changes in personnel as well as the changing market environment.
- Prepare current job descriptions so that the work to be performed is clear.
- Prepare competency models by level on the organization chart. Requirements need to be objective, clear and measurable. This is the time to look at what future competencies are required to achieve future strategic goals.
- Carefully define the roles to be played by each key stakeholder group in the succession planning process. Keep senior managers and stakeholders engaged in the process by establishing clear and measurable accountabilities.
- Establish talent pools by level based on the strategic strengths of the organization.
- Take an inventory of your talent. Ensure that individual strengths and areas for improvement are recognized. Do an organization wide SWOT (strengths, weaknesses, opportunities and threats) analysis to look for gaps in bench strength that will need filling either within or outside of the organization. Do these reviews on a periodic basis to ensure that no new gaps have developed.
- Evaluate the entire succession planning program on a regular (usually annual) basis. Compare the measurements against the stated goals to guide where you need to focus on.
Once you have this framework in place, you will then start to determine if you have capable (and willing) internal candidates that can be groomed for future advancement, or if there are areas that you need to go outside of the company. Where possible, going with an internal candidate is the ideal choice – they already are familiar with your business and it generally is less costly to train and develop from within, than it is to go through the process of doing an outside hire and then getting that person up to a competent level of performance. There is a risk that someone you groom may leave before you can move them into a higher position, but through proper management of expectations you should be able to create an increased sense of loyalty that will help with retention.
When looking at candidates for inclusion in this program don’t just take the easy path and target only your current high performers. Take a look at each individual and determine what their future potential is. As an example, just because Jim is your best sales rep does not mean that he would be your best candidate for a sales manager role. Becky may have more average sales performance, but may have a better personality fit to coach and lead your sales staff. Look for people who are clearly in the wrong role (based on education, personality, etc) and consider them for a hybrid role that could pave the way for an increased leadership role. Take the time to identify the potential within your organization, and then develop a plan to tap into it and better leverage your existing talent.
Finally make sure that there is buy-in for this program at the senior level. Nothing will derail this program faster than upper managers not participating fully in it. Some may see this as an exercise in pushing themselves out of a job. Ensure that there is a clear link between this program and the company’s strategic plan, with flexibility built-in to balance the long term and short term goals. By working this process into your current hiring process you will ensure that you are getting the candidates that you need in the future, not just a “good enough” for today’s need. The recruiting process is expensive and this process will give you the tools to be more effective with bringing on new people. Take time away from your whirlwind – short term pain = long term gain.