Succession Planning – A Critical Element of Your Business’ Success

Owners/executives of market intelligence businesses have many reasons for concern in today’s environment – adapting to disruptive competition, understanding and employing emerging technology, hiring and maintaining the right work force, assuring sufficient cash flow, creating a robust sales pipeline, guaranteeing high quality work to support long-term customer relationships – to name just a few.  One topic that is infrequently mentioned, however, is succession planning.  Everyone knows it is an imperative, but few have a sense of urgency concerning succession planning.  Yet, whether the transition occurs at an executive level or deeper within the organization, the ability to effectively transition leadership is simply good business practice.

Broadly defined, succession planning is the methodical nurturing of the next generation of leaders.  Great companies are known for their management bench strength.  Disrupted customer relationships, lapses in operational excellence, diminished employee enthusiasm or a sputtering sales pipeline are symptoms of transitions not well handled.  While strategic guidance and business growth are typically the domain of the executive suite, the battle for revenue to generate sufficient cash flow is often won or lost within the organization.  Hence, the need to design and implement strategies for succession planning deeper within the organization as well as the top.

Succession planning need not be difficult but must be methodical with multi-year organizational commitment.  It is anything but a one-shot deal or a quick fix.  As a starter for discussions within your own organization, consider these key tenets of succession planning:

  • Make certain your company’s strategy is set. Succession planning must support overall strategy. Successfully achieving business outcomes will depend heavily on the organization moving in the same direction and senior leadership having the right skill set to get there.   Even a well-orchestrated succession plan will fall short of its goal if there isn’t clarity about strategic initiatives and goals.
  • Identify key positions where succession planning is crucial. Spend time with your co-leaders to answer some of these initial questions:
    • Which positions within the organization must be fail-safe?
    • Are there known points of exit for the current senior individuals in the positions identified? The point of exit could be due to planned retirement or the desire of the company to eventually move that individual to other positions.
    • Who are the top employees that the organization wishes to keep for the long-term?
    • What skills are needed within the organization to succeed in the future? Which employees possess these skills or are the most likely to develop these skills with training?
    • Who do the individuals, currently in these key positions, believe might be good seconds or deputies?

These questions sound straight-forward but coming to agreement on the answers, not so.  Expect that your senior team will need extended dialog to reach consensus.

  • Don’t shy away from making hard personnel decisions. Discussing successors for key positions has the potential to result in the identification of individuals who do not fit into the long-term strategy of the firm.  It is best to guide these individuals to find opportunities outside your organization.  These are difficult decisions but in the absence of being proactive, three consequences will arise.  First, these individuals will likely begin to be frustrated as they see others being promoted to positions they desire, potentially leading to sub-optimal performance.   Second, resources (financial and human capital) required to groom the next management generation will be diverted to those less promising; ultimately limiting the success the organization can achieve.  Finally – and I say this with conviction – if the person isn’t a long-term fit, you are robbing he or she of the opportunity to excel elsewhere.  Sometimes this is best for everyone.
  • Create a roadmap with the selected individuals. Being ‘tapped’ as a next generation leader should be an exhilarating experience.  Once identified, a senior leader of the firm, the individual to whom the future leader will serve as a deputy and potentially an additional mentor (someone to whom the individual does not/will not report) should meet with the individual and create a formal roadmap for their progress.  The road map should consider long-term as well as short-term goals.
    • What skills or competencies does the organization need that individual to further develop or acquire by when?
    • What experiences does the individual need to have to fully prepare for the senior role?
    • What activities/roles should the individual undertake to ensure they have credibility within the organization?

Once developed, the individual’s goals should be separated into targets and reviewed quarterly.  Establishing the ongoing rhythm of setting goals, reviewing performance and setting subsequent goals is an important element of success.

  • Gradually increase the individual’s visibility within the organization as a member of senior leadership. For some individuals, this may not be necessary as they may already be visible as a senior leader.  For others, however, this may be a skill, on its own, that needs mentorship.  The organization should not be left guessing – creating measured visibility will be a signal to the organization that the individual is being groomed for a senior role.

The question often arises concerning whether it is simply better to wait until the need occurs and if there are no ‘ready’ internal candidates go to an external choice.  This is certainly an option and an external candidate may bring a needed fresh perspective.  However, be mindful of the fact that external candidates have, at best, an even shot at being successful.   The reason why is a worthy topic for another article.  Simplistically, internal candidates have a higher likelihood of success given their history with the organization – the question is whether they are prepared when the need arises.   A program, such as outlined in this article, will go a long way to ensuring his or her success.

Finally, and perhaps most important, start today.  At all costs, avoid a scenario where you need to give someone a crash course on an important role in the organization.  His or her success will be directly linked to the amount of time given to prepare for the role and the effort put into his or her preparation by the organization.

Jeff_Resnick

Jeff Resnick

Stakeholder Advisory Services

 

 

The Australian Market and Social Research Society is linked globally to 45 associations through its partnership with the Global Research Business Network (GRBN) and the Asia Pacific Research Committee (APRC). Click here to read about the AMSRS global network. This article is originally sourced from GRBN website.

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The Australian Market & Social Research Society Limited (AMSRS) is a not-for-profit professional membership body of over 2,000 market and social research professionals who are dedicated to increasing the standard and understanding of market and social research in Australia. The Society assists members to develop their careers by heightening professional standards and ethics in the fields of market and social research.

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