Article by HRBoss
on 10 Jan 2014
By Sonia Rawichadran, Client Solutions Consultant at HRBoss
Succession Planning (noun) ‘The process of finding suitable people and preparing them to replace important executives in an organization when these executives leave or retire’ – Cambridge Dictionaries
All, if not most of us, have at some point delved into the topic of ‘Succession Planning’, especially during the performance appraisal period. What exactly is Succession Planning? What does it really mean? Who does the planning? Why is it important? Do we need it?
In the recent issue of HR Asia, Succession Planning was made the cover story and covered topics such as planning for your CEO’s successor, the effects of the death of CEO’s on Company’s stock market, preparing the workforce and Company for change, the worry of not having a sturdy pipeline of talent/successors.
In an article on Understanding the Fundamentals of Succession and Transition Planning, only 35 percent of family businesses survive past the first generation of ownership. Only 20 percent survive to the third generation. Some of the reasons why family businesses don't successfully pass down the generations are planned, and others are not (A.J. Sherman et al)
These are all very realistic (and somewhat terrifying) scenarios in any business, yet it is not something that all companies think about until it’s too late. There are tons of templates, resource materials and white papers available online that can assist us to start planning. Before we go into a passionate discussion about what Succession Planning really is, let’s take a step back, and get down to the fundamentals.
Plans consist of meetings, follow ups, charts and due dates. However, sometimes, we fail to understand that not everything in paper pans out like we would like it to. Some, if not most times, writing things on paper can make us over-ambitious. We see many companies placing a lot of emphasis on planning rather than materializing, because, after all those meetings, due dates, charts and to-do lists, our focus is shifted from the core matter – Developing the next generation of leaders.
We can always have a blueprint of how we expect to realize this process, but, as we all know, change is inevitable. The blueprint needs to be an evolving document, keep it alive, and update it based on current affairs, strategies, market’s best practices, change in leadership and/or direction.
The easier it is, the higher the chances of us seeing it through. We sometimes find ourselves adding complex assessment criteria to a planning process in an effort to improve the quality of an assessment. Dr. Marshall Goldsmith, a recognized author and coach in the HR industry, says in his article that some of the criteria we implement are challenging even for behavioral scientists to assess, much less the average line manager. Since the planning process is only a precursor to focus the development, it doesn’t need to be perfect. More sophisticated assessments can be built into the development process and administered by a competent coach.
It’s difficult choosing a successor and even more difficult making that decision while maintaining objectivity and ruling out all possible emotions. Only give the promise of succession if there a real chance of it happening. Establish a timeline if you like, it helps to create a clear understanding of the role and responsibilities during the transitioning period.
As you work on your succession development, be sure to seek and be open to advice from external advisors so that you get a 360 degree view. This way, you will be able to make better, wiser and healthier decisions, while taking all factors into consideration.