Chapter 9 Succession Management

Succession Management- the process of ensuring that pools of skilled employees are trained and available to meet the strategic objectives of the organization.

It consists of a process of identifying employees who have the potential to assume key positions in the organization and preparing them for these positions. The identification of talent is always paired with ongoing programs to develop that talent.
Sucession management is the great failing of entrepeneurs.
Only 26% of all companies report having a formal succession plan in place.

Replacement Planning- the process of finding replacement employees for key managerial positions.
Replacement Planning has evolved into succession management by:
  • broadening the focus
  • expanding the time horizon
  • creating a talent pool of replacements
  • improving the evaluation system
Rating System - succession management approach, several raters give current evaluations on an employees performance. Increased use of 360 degree feedback mechanism reveals various aspects of any candidate's style and performance

Reason for Succession management
  1. Provide increased opportunities for high-potential workers
  2. Identify replacement needs as a means of targeting necessary training, education and development.
  3. Increase the talent pool of promotable employees.
  4. Contribute to the implementing the organizations strategic business plan.
  5. Help individual realize their career plans within the organization.
  6. Tap the potential for intellectual capital in the organization.
  7. Encourage the advancement of diverse groups.
  8. Improve employees’ ability to respond to changing environmental demands
  9. Improve employee moral
  10. Cope with the effects of voluntary separation programs.
  11. Decide with workers to terminate without damage to the organization.
  12. Cope with the effects of downsizing.
  13. Reduce headcount to essential workers only.

Succession Management Process (Just an outline, feel free to add more details) - links replacement planning and mangement development
1 – Align Succession Management Plans with Strategy
-development must be linked to business plans and strategies.

2 – Identify the Skills and Competencies Needed to Meet Strategic Objectives
Job-Based Approach-suggests that employees who have significant experience as managers, and who have acquired job skills such as motivating, delegating, marketing, or managing finances, will make successful managers.
Competency-Based Approach-groups of related behaviours that are needed for successful performance.
-measurable attributes that differentiate successful employees from those who are not.
-collection of observable behaviours.
-with uncertain future in which skill needs change rapidly, succession management should focus on the development of competencies.
Managerial competencies
  • General mobility skills and knowledge-include effectiveness in group processes, communication skills, flexibility and adaptation.
  • General managerial core competencies-include the ability to build teams, and to persuade employees to accept organizational changes.
  • Detailed, job-specific competencies-vary by function and level.

3 – Identify High-Potential Employees
- temporary replacements --> short term, for covering illnesses and vacations
- replacement charts --> charts with predicted departure dates for employees along with a short list of possible successors
- strategic replacement --> identifies leadership competences that it needs
- talent management culture --> talent must not only be developed at the top but within the entire organization, looking at the employee "brand", and why employees would want to work for the particular organization is important

4 – Provide Developmental Opportunities and Experiences

The advantages to promoting from within an organization include:
  • accurate employee records of past performance
  • employees understand and are committed to organizational objectives
  • employees know the culture of the organization
  • research shows that CEO's recruited externally delivered annual returns 3.7% lower

Job Based Approach- focus on duties, skills, job experience, and responsibilties required to perform the job. May not be adequate since jobs change rapidly.

The focus here is on the development of competencies, not just on job preparation. The approach is to provide experiences to realize leadership potential. The following list identifies the most common development methods used:

Promotionan employee’s upward advancement in the hierarchy of an organization
Job rotationsa process whereby an employee’s upward advancement in the hierarchy of an organization is achieved by lateral as well as vertical moves.
In flat organizations, where promotions are rare, job rotations are preferred.
Benefits of Job Rotation:
  • Reduction of boredom and fatigue
  • Provides relief for those who have hit a career plateau
  • Increases an employee's job and career prospects
  • Creates more satisfied, motivated, involved and committed employees

Special Assignments
Still a faoured path to the development of managerial skills. Can provide an opportunity to network and test their skills in a new environment. Mistakes must be tolerated, as candidatse may quickly assume that these special assignments are synonymous with failure, fostering a culture of fear where no employee dare be innovative or take bold measures, and finally, derailment from the fast track.

Formal Training and Development: The majority of companies use traditional and passive instruction techniques and rate them least effective, but they are fast and easy to use. Most use lectures, seminars, and discussion groups more often than behaviour modelling and experiential leaning. Critics believe that these training programs teach very specific skills that might not be robust enough to stand the test of time and successfully prepare managers for rapidly changing environments.

Mentorsexecutives who coach, advise, and encourage junior employees

5 – Monitor Succession Management

Succession planning enables your organization to identify talented employees and provide education to develop them for future higher level and broader responsibilities. Succession planning helps you "build bench strength." Succession planning helps you decide where people belong on the bus. ( I liked this statement as I often hear it at our own company.

Aligning Succession Planning, Strategy - HR Reporter I hope everyone can access this. Bottom of page 22 by Brian Kreissl.

Types of Competencies:
1. Core competencies
2. Role or specific competencies
3. Unique or distinctive competencies

Potential Negative Effects of Succession Management

-Employees can be demotivated if not chosen -They may feel their work is underappreciated
- It creates different "classes" of employees: ie Crown Princes
-May create jealousy and animosity
-Employees who are chosen -may no longer exert the same amount of effort towards their job and 'coast'
-may not receive the proper training and investment by the company
- if they don't receive the position they will be humiliated

Risk of Spotlight:
-Executives may be reluctant to spotlight talented employee for fear of that employee being stolen by another unit
-Managers fear by developing their successors that they will be replaced sooner then desired.

Selection Bias:
-Managers tend to pick those who most closely resemble their style and demographic which propagates white male management.

Unpredicatable Futures:
-Similar to a selection bias there is a tendency to clone current executives and to play the future as a continuation of the present. an interesting article on the succession of CEO's for large organizations, and the implications.

Interesting article on recognizing management potential