Effective Approaches to Succession Planning in Modern Talent Management (Article 05)

Succession planning is perhaps one of the hottest topics today as a result of ethical issues, compensation, development and implementation. Recent research points to those who do internal succession well, with little disruption and ready change depend on their ability to execute plans (Charan & Colvin, 1999, 2001). Henri Fayol (1841-1925), French pioneer of management history, was among the first to recognize and document the universal organizational need for succession planning (Rothwell, 2001). However, effective leaders down through the centuries have developed and implemented succession plans for their organizations. It shows that “spiritual leaders are always investing in the next generation of leaders” (Blackaby & Blackaby, 2001). 

Why is this idea of succession planning so important? There are many examples of organizations that experienced a departure and unsuccessful transition of an executive leader. To further aid organizations in understanding the importance of succession planning and preparing them to undertake the process. 

According to Bill George (2003), former CEO of Medtronic, “One of the most important things leaders do is to prepare for their own succession”. 

Departure defined succession planning is a process that is in place for a future planned retirement or permanent exit of the executive. Planning under these circumstances allows an organization to position itself for sustainability and continued success upon the executive’s departure and includes input from the current executive. Succession planning involves identifying key posts within an organization and supporting. 

The formulation of organizational strategies and operational policies for succession planning is needed to maintain the continuity of advanced practice roles.

Succession planning is an effective strategy used over many years by business and industry to address leadership challenges facing organizations. Successful succession planning processes are driven by strategic planning (Rothwell, 2005).

By incorporating below effective approaches into any succession planning strategy, organization can create a robust and adaptable framework that prepares the organization for leadership transitions and ensures a continuous pipeline of capable leaders.

Early Talent Identification

Early identification of talent is important for the development of broad range of experiences needed to fill executive positions (McCall, 1998), and our interviewees stressed the need to reach deeper into the organization. Fortunately, our understanding of early talent identification is improving, especially the role of learning and learning agility, which are critical indicators of success in senior leadership positions (Lombardo & Eichinger, 2000). McCall and his colleagues have identified several learning-oriented dimensions that are helpful for early identification such as “seeks opportunities to learn,” “is committed to making a differences,” “has the courage to take risks,” “seeks and uses feedback,” and “learns from mistakes” (McCall, 1998, pp. 128–129). Measures of learning ability, defined as the ability and willingness to learn from experience, or the ability to learn as conditions change, also are available (Eichinger & Lombardo, 2004; Lombardo & Eichinger, 2000).

One of the most heavily utilized approaches for identifying talent for succession planning involves performance evaluations. This approach has problems, given evidence of negative bias in performance evaluations of minority managers (Kilian, Hukai, & McCarty, 2005). Assessment-center procedures are also used for succession planning and have potential for diversity initiatives (Conger & Fulmer, 2003; Klimoski, 1997; Yeung, 1997). 

Leaders in succession planning such as Eli Lilly, Hewlett-Packard, Citigroup, and the U.S. Army have adopted group approaches that have the advantage of utilizing more than one individual’s perceptions of potential (Karaevli & Hall, 2003). Along this line, Deloitte & Touche has changed its succession process from one in which the departing manager selected a successor to a more centralized approach. When vacancies arise in the top ranks, senior managers across the country review short lists of candidates keeping diversity objectives in mind (Armour, 2003). 

Another concern for talent identification is related to the residual effects of differences in past assignments. Current successors to top-level positions often have benefited from prior advantageous developmental assignments and have sometimes been selected simply due to their similarity to past incumbents in terms of work experiences and demographic characteristics of gender, race, and age (Frase-Blunt, 2003). Such similarity biases are more likely to occur in the absence of formal succession planning (Rothwell, 2001).

Individual Development Plans

An Individual Development Plan (IDP) is a personal strategic plan to realize job-related, career-related, and/or professional development objectives. An employee can collaborate with supervisors, managers, mentors, colleagues, family – all those people who are invested in that individual – to develop it. For supervisors, an IDP is a commitment between you and your employee to help guide their growth and professional development.

The creation of an IDP starts with an initial conversation between the supervisor and employee to identify career objectives and related growth areas (future job functions and related competencies). It’s also a prime time to agree on an IDP discussion schedule -which is separate from a conversation about performance related matters.

The IDP process consists of 5 stages:

1. Defining career objectives and related competencies
2. Identifying and assessing growth areas 
3. Strategizing best and most appropriate possibilities for enabling and spurring growth
4. Reconciling possibilities within the overall context of short- and long-term objectives, and 
5. Monitoring, assessing, and adapting the IDP as needed.

Cross-Training and Job Rotation

Mentoring and Coaching

Scholars have found differences in mentoring experiences when different races and genders are involved (Noe, Greenberger, & Wang, 2002; Wanberg, Welsh, & Hezlett, 2003). For example, when women are mentored by women, they are likely to learn more about overcoming barriers to promotion and methods for achieving career and family balance (Noe et al., 2002; Ragins & McFarlin, 1990). Nonetheless, cross-gender mentoring relationships can add value because they enable men and women to gain insights and perspectives about how the other gender handles workplace issues (Clawson & Kram, 1984; Noe et al., 2002).

Nonetheless, cross-race relationships require that mentors have diversity skills. With cross-gender mentoring relationships, there also can be problems unless mentors and protégés maintain appropriate levels of admiration, informality, respect, and trust, and act in a manner that does not create public image problems (Clawson & Kram, 1984). Not all mentors perform well in such roles, but some are truly exceptional. Another interviewee emphasized the importance of training mentors and the value for basic guidelines such as advising mentors to avoid discussions of sensitive issues like race until the parties have established a strong relationship.

The retention of women and minorities, which is critical for program success, is being addressed with a number of different practices. A number of companies have been using affinity groups to provide informal guidance and networking assistance.

Succession Pools and Talent Pipelines

A succession management pool is a list of employees who are qualified to receive promotions to positions that might need specific people to fill them after being vacated. When creating a succession management pool, company leaders can identify candidates within the company who are especially well-rounded, who have certain technical skills and who have training in particular concepts or practices that a position performs.

One way to build an effective succession management pool is to review the key positions that a company might need specific talent for and then identify current employees who exhibit the traits that each key position requires. Company leaders can then reference this list whenever someone leaves a key position for immediate recommendations for candidates they can promote.

Leadership Development Programs

A recent comparison by Hewitt Associates of 20 top companies, including such companies as 3M, GE, IBM, Medtronic, Pitney Bowes, and Procter & Gamble, found that 100% of the CEOs in the top group (defined as companies that have built a sustainable pipeline of future leaders) were involved with leadership development relative to only 65% of other companies (Salob & Greenslade, 2005). Colgate-Palmolive, ranked among the best companies in diversity, devotes four sessions each year to developing plans for high-potential minorities (Sherwood & Mendelsson, 2005).

Leadership support for diverse succession planning is also reflected in reporting relationships. A recent survey of 1,700 HR executives found that a relatively small percentage of the companies for which the respondents worked (30%) had direct reporting relationships between their diversity officers and their CEOs (Alleyne, 2005). Aside from the leadership provided by CEOs and diversity officers, management of diversity should be embraced by the entire leadership team and not perceived as the exclusive domain of the HR function (Childs, 2005). In contrast, an interviewee from another company with a fairly comprehensive succession planning program indicated that until recently, the company had only addressed gender diversity in a reactive manner by asking, during the process of compiling lists of high potentials, whether any women candidates ought to be considered. Slow progress on diversity issues points to the importance of having more responsive leadership.

Measurement and Evaluation

Ideally, evaluations should draw on both qualitative and quantitative measures. Qualitative measures may include factors such as satisfaction with the process at multiple levels of the managerial hierarchy and across gender and racial groups, as well as perceptions of fairness and usefulness. Such measures could include perceived smoothness of succession and the perceived quality of the talent pool. Quantitative metrics may include measures such as the percentage of diverse successors obtained internally, waiting time or ratios of “ready now” potentials to incumbents, and reservoirs of cross-functional or international experience, as well as attrition rates for diverse high potentials (Conger & Fulmer, 2003).

One of our interviewees emphasized the importance of setting diversity targets in anticipation of the future racial composition of the United States. His pragmatic justification of his organization’s adoption of special programs was that “you are not going to be successful by osmosis.” Another interviewee, who stressed the importance of measuring the impact of such programs with more than one indicator, noted that her company uses 14 different measures of program effectiveness, including retention, advancement, hiring, and development. A different interviewee’s company conducts periodic “pulse surveys” of employees to determine satisfaction with their career succession. Whatever the metric or diversity scorecard used, it is important to allow sufficient time, perhaps four to five years, for the effects to be evident before a program is evaluated and potentially disbanded (Carnazza, 1982).

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