Succession planning used to be something reserved for
senior management. In recent years, however, more and
more organizations have expanded the process to include
greater numbers of positions and people as they look to
leverage human capital to sustain competitive advantage.
Succession plans run the spectrum, from simple to complex,
depending upon whether they capture a small population or a
global talent pool. Plans are sometimes piecemeal, focusing
only on specific divisions or operating units, but they can also
be organization-wide. Even the most elementary succession
plans are good, proactive measures for identifying back-up
candidates for key positions and ensuring that they are
appropriately developed.
What goes into a successful succession plan? Here are the
key elements that many established organizations include in
their succession plans:
Key position identification.
Critical positions that require immediate and future backup
are considered “key positions.” Many organizations create a
database of middle- to senior-level management positions
and individual contributor roles where market demand is high
and supply is limited. The database should reflect both
short-term and long-term organizational needs.
High-potential employees.
These are employees identified in anticipation of filling key
roles in the long-term. The organization's pool of high-
potential employees should prescribe development within a
broad range of disciplines, such as finance and accounting,
operations, and marketing. Organizations need to identify
multiple high-potential employees for each key position,
given anticipated attrition in a time period that exceeds
three-to-five years.
Future replacements.
Experienced employees who can be developed in three-to-
five years are considered future replacements. Each key
position should have multiple employees designated for
future replacements, given attrition that could occur within
that timeframe.
Ready replacements.
These are employees and managers capable of filling key
positions immediately. An effective succession plan
identifies each key position and ensures a minimum of one
ready replacement, but preferably two to three.
"At-risk" employees.
Oftentimes, organizations lose employees who are in high
demand and who also have less than five years of service
with the organization. Such “at risk” employees require
frequent monitoring to ensure that performance reviews are
timely and development efforts take place as scheduled.
Retiring employees.
More and more people are retiring early these days.
Employees and managers who are within five years of
normal retirement should be monitored for such plans.
Marginally performing employees.
These are people who need further development, more
suitable roles within the organization, or outplacement. They
should be identified because they often block the progression
of high-potential employees and others designated for future
replacement.
Diverse employees.
This class includes women and employees of various races
and ethnicities who have been identified as ready
replacements or high-potential employees. It is important
for succession plans to identify such individuals not only for
the purposes of equal employment opportunity or affirmative
action documentation, but also to address a segment of the
workforce that typically has special development needs or
faces unique organizational challenges.
International employees.
These are employees designated for international
assignments who may have special development needs,
including cross-cultural coaching and specialized training in
language proficiency. Most multinational organizations today
have established pools of employees for potential
international roles and maintain a record of various
languages spoken or read, as well as corresponding levels of
proficiency.
Key position replacement status and gap analysis
.
This portion of a succession plan identifies areas of
vulnerability and provides the foundation for development
plans for both future replacements and high-potential
employees. It is critically important to construct detailed
development plans as a basis for comprehensive analysis
that will narrow the gap between key positions and
designated replacements for both short- and long-term
needs.
Development plans.
These bridge gaps in position requirements and existing skill
sets of designated employees and managers. Organizations
should manage succession planning just as they manage
other key business processes – with plans that contain goals
and objectives, measurement standards and metrics, and a
process for periodic monitoring.
Knowing that good planning is essential to effective asset
management, leading organizations typically manage
succession plans the same way that they manage their
strategic and operating plans – by frequently assessing
progress and adjusting to changing priorities as needed.
In a knowledge-based economy, it is more important than
ever to continuously respond to changing market conditions
as a way of protecting both hard and soft assets.
Organizations that view human capital as one of their few
sustainable assets in today's highly competitive economy are
considerably ahead of the curve and on the way to becoming
employers of choice – if they aren't already.
Marilyn Blocker is a member of WJM Associates'
executive coaching and organizational effectiveness faculty.
Drawing upon over 20 years of experience with leading
Fortune 500 and healthcare organizations, she specializes in
coaching, succession planning, and large-scale organizational
change associated with turnaround, consolidation,
restructuring, and M & A integration.
