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Published: 7 month

4 tips for smart succession planning

Succession planning and development is a cornerstone of business continuity and sustainability. This goes far beyond identifying a potential successor for every manager. How does the process work? What tools can we use as HR? Written by Emese Pálfi-Poczik, a consultant in Arthur Hunt's consulting and development business.

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Theoretical definitions and concepts of succession have been with us in HR for a long time. They periodically come to the forefront of our attention, and then a more attractive trend we haven't heard of comes along to distract us from the issue. However, succession interventions should not be seen as a quickly fading trend.

Many organisations have built succession planning and education into their processes, investing time and resources in the talent and leaders of the future. However, some companies are still in the infancy or lacking in action on succession. But given the changes in recent years, it is important to have the right expertise and attention to succession planning.

Research shows that there is still work to be done.According to research by consultancy PwC, 79% of the best performing companies - those in the top one quarter - are consciously engaged in succession planning. By comparison, only 21 percent of all companies surveyed have a formal succession plan. The survey also found that 86 percent of managers surveyed believe succession is an urgent priority for their business, but only 14 percent think they are doing it right. So there's a huge gap between the best performers and the rest and between what they think and what they actually do.

What is succession planning?

In many cases, we find that succession planning boils down to identifying potential successors for each leader's position, and sitting back with the comfort of knowing that we have found a replacement for each position. But it is a much more complex process than that.

Succession planning and development go hand in hand and can be described as the following process:

1. Identify the key and critical positions required to align the strategy with the organisation's corporate vision and goals.

2. identify the competencies required to fill these positions.

3. compare the skills of the employees in the current position and define a development plan where necessary.

4. plan ahead as a critical position becomes vacant and identify potential successors who can fill that position within a certain timeframe.

5. once potential successors are identified, the process of assessing competencies and determining development directions begins.

Effective succession planning thus
in all cases requires awareness, measurement and development. It is also linked to the HR, financial and training development processes of the organisation.

Don't just focus on managers

In many cases, however, we find that succession planning is exclusively hierarchical, limited to managerial positions, and only involves linear, upward progression. If we spare no effort to identify positions critical to the continuity of the business, we find in many cases that we not only need to define succession at the managerial level, but that critical positions also appear at the expert level.

Some tips to ensure that succession planning is even more thoughtful:

1. Use network analysis! Network analysis can be a very useful methodology for identifying critical positions and measuring competencies. Network analysis can not only map the interconnections within the organisation, the way information flows, the direction of knowledge sharing and the impact of individuals, but also provide a picture of motivation, engagement and potential attrition. For this reason, it is worth comparing the results of organisational network analysis with our own succession planning.

2. Use the market map methodology! Organisational supply planning and development processes usually require a lot of internal focus, but it pays to monitor the market at the same time. It may be worthwhile to look at a key position, whether managerial or expert, using a market map methodology. This service will give you an accurate and objective picture of the professionals available for a given position, their salary requirements, their skill set and their availability. This allows me to see more accurately the level of competition for a key position. Read more about our market map methodology here.

3. Be flexible in your approach to succession planning Don't just believe in the classic hierarchical promotion and succession. Encourage the development of the expert level and be open to cross-functional movement. After all, there may be drop-outs who could be motivated and effective in other areas. However, if they do not see this as a viable option because the organisation does not provide the opportunity, they are more inclined to look for new, motivating employment opportunities in the market.

4. Clarify the transparency of succession planning and development within the organisation. It is worth considering the extent to which the succession planning process is openly undertaken in front of employees. Some of it is obviously the responsibility of top management, as they are the ones who are responsible for identifying key positions that fit the strategy and for preparing the succession plan. So there will be a part of succession planning that needs to be handled discreetly. However, it is also worth involving middle management levels in the succession planning process, as they have a very useful insight into who will be able to fill these positions effectively and with motivation in the future. And the information from many levels can be collated at the end to minimise the chances of management determining the identity and development needs of potential successors according to their beliefs rather than reality.

If you would like to gain a deeper insight and understanding of your organisation's succession planning capabilities, the Arthur Hunt team is here to support you.

Emese Pálfi-Poczik, consultant in Arthur Hunt's consulting and development business

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