By: John Hamilton, Service Strategies
The question is, do we really need a succession plan during this depressed economic period when unemployment is at its highest in decades? In order to answer the question, we need to better understand what a succession plan is and how it relates to running a service organization. There is a perception that succession planning is only applicable for senior executive positions such as CEO, COO etc.
The true definition of a succession plan is “the process of identifying and developing suitable talent that are able to replace key positions as and when required”. The key phrase being “developing suitable talent” which could be any critical position within your service organization, technical or management.
There is a five step process that helps simplify succession and development planning:
- Identification of Key Positions – Start by identifying areas where significant loss of knowledge and skills could occur soon and where the organization is most vulnerable. Based on this criteria, select the functions that would most benefit from succession planning. An example of this could be a senior technical person near to retirement that has unique mainframe knowledge. There is major exposure as you still have a large base of mainframe clients under contract that rely on this lone individual’s expertise.
- Evaluation of Potential – This involves classifying candidates using a nine matrix selection grid. The horizontal axis is for performance in their current position and the vertical axis is for promotion potential. This tool helps to rank potential candidates and identify most capable to succeed in the key position.
- Replacement Inventory – Prepare a replacement inventory of candidates for all of the key positions identified in step one. Each position should have a minimum of three successors rated as “ready now”, ready within one year” and “ready within two to three years”.
- Competency Mapping – During this step, you need to develop a profile of the competencies required for the successor position. These maybe a combination of the skill demonstrated by the incumbent and a few extra desirable skills. Some of these maybe somewhat subjective, interpersonal, perseverance etc., however there should be a heavy bias on the more objective measurable skills and competencies. The successor candidates need to be rated against these competencies to identify gaps and level of readiness.
- Individual Development Plan – Based on the gaps identified in step 4, development plans need to be created that set short term, mid range and long term dates and goals. The actual personal development could be in the form of classroom training, external management development programs, job rotation or other learning projects. In order for the IDP to be effective, it must be monitored and progress tracked quarterly.
Once we have our succession and development plan established, senior management need to have oversight and visibility through a few key indicators. These can be broken down into four simple metrics:
· Metric 1 – Percent of positions with ready replacements
· Metric 2 – Priority positions with limited or no successor
· Metric 3 – Percent of positions covered with a succession plan
· Metric 4 – Number of positions filled internally versus externally
Succession planning is an ongoing process and essential for the stability and growth of any organization. If managed correctly, it will reduce the cost of hiring externally and allow you to develop and promote talent from within. Top talent is always in demand, even during this current economic climate. When the economy does improve, the hiring frenzy will start again and companies that don’t value and develop their top talent will suffer severe turnover.
If you would like to further discussion succession planning send us a note or post a comment here.