Passing the Baton in Human Resources
Imagine establishing an organisation with your sheer hard work and perseverance, nurturing an idea to realise its potential and transforming it into a live business prospect aiding to the growth of an individual, an organisation and every-one associated with it. Entrepreneurs generate employment for human resources – thousands of young minds with immense talent, as well as experienced professionals to exploit their maximum potential where they can visualise their growth and secure their future. Now, picture having no-one around, to lead or to follow! This is exactly why Human Resources are crucial for any organisation.
One would be staggered, thinking about how they are going to survive and for how long? This fear will indeed take over the sanity, due to the loss of purpose, and the ambiguity created will disrupt the ecosystem. One is sure to be demotivated in such a fragile environment. To quote from a personal experience, how the team was left disoriented by an announcement of their leader resigning and leaving the organisation on a sudden notice just around the annual review of their performance management process. That was a time to be worried about but, the management had a plan in place, of course, without which it would have been quite difficult for the team to cope up with the situation. And, there came in, ‘Succession Planning’, which we are going to explore in the next section.
Meaning of Succession Planning
What happens when a senior member in a significant position is no longer available? A business leader leaves unexpectedly, a board member or a CEO dies? How do we ensure the retention of the workforce and their motivation? How to keep the next generation prepared to step up in their roles? How do we make sure that business continues in such scenarios? The solution to the above situation is to plan for ‘succession.’ Be it a small enterprise, a family business or a large-scale company succession planning ensures that the business operation is buoyant. It is critical to secure the future of an organisation. It gives us a brief insight into why succession planning is required. But what is succession planning? Let us understand it in little detail here:
Succession planning is a long term, continuous, structured and confidential process. It is a talent management process that builds a pool of trained workers who are ready to fill in the key roles when leaders and key employees step down. Succession planning relies on talented workers ranging from entry-level to senior positions who get groomed for critical roles. We also know that not all employees can be identified as successors as there are just not that many strategic positions to fill. Subsequently, there would be some employees who would feel left out and under-appreciated. Hence, maintaining the confidentially of a succession plan is of utmost importance.
Importance of succession planning
As the senior management and board members are the main contributors in the formation of Successors, they must highlight the need for a succession plan. It is their responsibility to invest time and effort to ensure its significance is well communicated and understood within the organisation. However, the complete ownership/accountability to execute and implement the process in the most effective way lies with the Human Resources (HR) department. HR must work closely with the higher management, to work on the succession plan efficiently. Their role is to prepare the next generation of leaders to move up. Hence, HR must:
1. Find the right talent who fits the ethics and meets the business requirements.
2. Hire high-quality individuals/great talent for all key/critical positions.
3. Identify the right candidates in the existing employee strength and develop new leaders. Succession planning increases the readiness of experienced and capable employees who are prepared to undertake leadership roles as they become available. Hence, people development becomes crucial.
4. Once HR has identified potential leaders, it is their role to make the programs available to develop critical skills. Thus, the HR role in succession planning is to mobilize the talent, fill the gaps and reduce the loss of business continuity. Active job rotations help to cross-train the employees and keep them future-ready. HR needs to prepare individuals to meet future challenges.
5. Identify the organization’s top performers to analyse competencies and potential roles. HR should use the appropriate instruments to provide the most accurate measurements and avoid to overlook the potential.
6. Identify succession gaps and find interim leadership role candidate if they do not get a replacement and establish plans for the development of such professionals.
7. Ensure business-critical roles are identified based on business needs. They need to work with department heads to identify competencies and need experience for each of these roles.
8. Match the potential future job openings and build capability through mentoring, coaching and training of selected members to become the successor when the need arises. Thus, the need to focus on learning and development becomes significant.
9. Include a process to identify and capture critical knowledge. Succession planning tends to target leadership role but to consider the transitioning roles or retiring is equally important. Hence, taking the note of the processes the individual is responsible for, being aware of who is cross-trained and anticipating the obstacles is substantial to ensure critical knowledge does not “walk out the door.”
10. Evaluate and recommend appropriate compensation for fast-track performers to make sure they are well-rewarded for their performance.
11. Develop reporting mechanisms to inform/apprise leadership and the board of individual candidates’ progress.
12. Prioritise the succession planning process and should ensure it remains a top priority for other senior members too.
13. Challenge the leaders to find the diverse talent to be a successor.
Succession plan requires ongoing work from management, as well as from the prospective employees who agree to become successors. But, as employees move in and out of the company, training needs, schedules and potential successors change. It is the responsibility of the HR to ensure succession plans remain up to date.
As this is a very confidential process, it is very important to form a core committee of most reliable members who can help to identify the mission-critical roles (positions, if left vacant can pose a risk to the organisation), recognise the potential candidates to be the successors and agree on a shortlist of candidates without disclosing the discussion agenda at any point of time. The reason that the meeting needs to be confidential is that it’s risky to share openly about succession planning meetings. You may have a high potential employee in the discussion who could not be on the final successor list for one reason or another. It that employee knows about it, it may be discouraging and cause him or her to seek opportunity elsewhere.
The committee members should possess skills to energise others and shall be able to execute the succession process well along with the HR to deliver the desired results. Also, clear alignment of competency and values of the organisations is very important before we work on a succession plan as succession planning can be done in a no. of ways. The best practice model is competency ( behaviour needed to be successful in an organisation ) based model. An example of competency is “Critical Thinking.” Thus, we would need to hire people who are good critical thinkers to be successful.
We need to understand that shortlisted candidates will go through the leadership pipeline which means the potential employees go in the pipeline, they are developed, stretched, groomed and leaders come out from the other end ready to fill the critical positions. Hence, we can say that succession planning is very much a part of the “bigger umbrella” that is “Leadership Development Program.” Succession planning is a confidential and consultative requirement. It is a top to bottom approach. It is critical to know the business vision and strategy of the organisation to choose the right successors. Succession planning is a continuous process to ensure we have enough supply of strong and ready leaders to fill the leadership roles whenever they are open. This ongoing process of succession planning requires frequent revaluation to reflect changing business strategy, the external marketplace, talent development needs and emerging opportunities and threats. Performing this analysis, ideally on an annual basis, can help ensure your business is prepared to replace any leaders quickly in a framework that links up naturally with your existing HR operations.
The activity may seem unnecessary and a waste of time for companies because they have to plan and prepare ahead and preparing people for jobs when both jobs and people are changing all the time. It will be like a vicious circle. However, it is important to note that it is “business-critical” to fill in the senior positions/top roles. Thus, keeping the image of the company far from being fragile. All organisations (large or small) can benefit from the principles of identifying crucial job skills, knowledge. However, succession planning is extremely important in case of small business/enterprises as delay in setting up the succession plan process can endanger the survival of small companies. One of the big mistakes small business owners make is identifying their desired successor first and then working backwards to come up with the process that gets them the result they want. Instead, starting with the basics, linking succession planning with the broader human resources review of business goals. Having a vision for the company’s long-term future in mind while building the requirements. The succession planning, like everything else, should reflect the business goals before the personal preferences if you want your business to thrive after you’re gone. Without the ongoing succession plan, there are risks which companies may face. For instance, losing star performers, giving up the market advantage and incurring additional costs. HR teams can facilitate succession experience by helping leadership understand people’s strengths and potential. By having these imperative conversations with leadership early and often, we can secure the future of the company.
Thus, to conclude, we can say that HR plays an indispensable role in the implementation of succession planning than actually initiating or creating the same. Hiring right talent after the initial meetings of succession planning or building capability of existing one. Identifying people, training them by setting up yearly goals, cross-functional training or functional training if required in the critical roles is among the key responsibilities of the HR. It is the job of the HR to think about how the jobs are changing and what sort of leader the company may need next.