Employee Matters: Succession planning

April 13, 2009
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Far too often, succession plans are like tornado drills in the Midwest, something companies think about only when the wind is already peeling off the roof. By planning for future staff absences before the tornado sirens sound, companies can more easily transition from one person to another.

“Succession planning involves making sure you get the right person in the right place at the right time,” says Rodney Vandeveer, associate professor of organizational leadership and supervision at Purdue University.

While the process does involve a little luck, most effective succession plans result from an ongoing assessment of planned and orderly transitions. The ultimate goal is to move authority and work from one person to another without disruptingthe organization’s continuity.

To maintain continuity, a company must create a constant flow of talent that they’re preparing to take on future responsibility.

“An organization needs to have not a bench of talent and skills, but a pipeline.” says Del Craig, executive vice president of business operation at Elevance Renewable Sciences, which develops vegetable oil-based chemical products.

Talent movement is now vertical, not horizontal. Within performance reviews and skill-development planning, it’s important to identify where future key leaders want to go. Craig stresses that by having open conversations about their futures, it’s then possible to build a development plan aimed at filling experience gaps already identified in the company’s succession plan.

Though an organization should wisely view all level of employees as potential pipeline talent, special care should go into transitioning the deep historical knowledge held by longtime senior employees. Vandeveer reminds us, “It’s important to focus on the executive offices, who hold the majority of specific business knowledge.

“They have more background as how the culture of a business is put in place and who are, in fact, the people you are planning to move up.”

Creating a succession plan is a simple process, according to Lance Woodbury of Kennedy & Coe, a firm with deep expertise in succession planning based in Garden City, Kan. It consists of writing a list of names, outlining a process of experience, training and education.

“What’s hard is the discipline needed to do a job every day and still create opportunities for others to learn about your job,” says Woodbury, who has developed succession plans for many organizations.

Our experts agree that ideally, this would be formalized in a company’s performance management system, with the expectation that section leadership will encourage pipeline talent and add momentum to the process.

Now that you recognize what an organization needs for succession planning, it is important to know the scale of the job. Not in recent memory have there been so many workers poised to retire from the workforce at once. Normal attrition has become a flood of retirees. Without a succession plan in place to staunch the flow of knowledge, a company can become anemic. Matt Lange, the development coordinator of the North Carolina Dairy Advantage program is in a unique position to see the tip of this exodus. Frequently, he will meet farmers in their 70s still holding all the reins of an operation, while their successors are left on the fringes.

“Inevitably, it comes down to actual human capital invested in the succession,” Lange says.

This is a two-way street; experienced business leaders must invest in their successors. Succession planning is part of this investment and takes time. Lange says that human capital, adequate financial resources and measurement tools for success are critical if the process is to be successful. The best plan insists that management starts talking, planning and identifying gaps and talent before an unexpected staff absence.

To secure success in succession planning, the process demands an ongoing discussion in an organization’s management. A company must identify skill gaps, observe demographic trends, offer diligent cross training and prepare talent with the experience they need for the next step in the pipeline. It is important that an organization chooses wisely the method for providing these tool box skills for their brightest pipeline talent.

“At a time when changes are happening quickly and businesses need to move fast, succession planning is not just relevant, but a critical aspect of a company’s ongoing success,” Woodbury says.

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