Finding Success Through Succession
LARGE COMPANIES often go through complicated and lengthy processes to achieve continuity in the executive suite. This is called succession planning. They may plan many years in advance and carefully groom those they are considering for promotion. These efforts are based on the assumption that it is beneficial to promote people from within the organization. Any organization—or department within an organization—can benefit from some level of succession planning.
A good succession planning program allows existing senior executives to observe people over time, promote them step by step, and train them to be of the most use to the company, its needs, and its culture. The plan can simultaneously be used to enhance employee productivity and loyalty. This can be accomplished by creating career development programs that dovetail with the company’s succession plan.
Career development is typically a voluntary counseling and testing program offered to workers. Some companies have in-house specialists who serve as career counselors. Other companies prefer to use outside professionals for these services. If a company cannot afford full-time counselors, it should work with the same professional consultant over time to maintain continuity.
Although a company may not need to replace key staff members for many years, creating the chain-of-command and experience that will allow a new executive to take over is a valuable exercise. Even if no replacement is needed for many years, the advance planning will help the company develop a better sense of its needs. Such examinations often lead to corporate restructuring or an overhaul of job descriptions.
Companies should begin a succession planning program by examining the hiring process. Does the company only look for candidates with the limited skill sets needed for each specific job or does it look beyond the needs of the job at hand, seeking persons who want to grow with the company? Trying to find people who have the potential for being promoted furthers the long-term interest of the entire organization.
As part of the planning phase, executives must communicate with current employees to ensure that fearful workers do not sabotage the plan. Many people are afraid to hire those who they think might threaten their own positions. These insecure managers hire those they think they can control, rather than those who have the potential to replace them. This attitude must be changed.
This change can take place only if the company educates current leaders on the program and its effect on the future of the organization. All the managers in the company should be aware of the importance of selecting, managing, and training the best people they can find.
Managers must also be given opportunities to expand their own knowledge and experience as part of the program. Succession planning reminds current executives that there is the potential for them to pursue more creative outlets in their own jobs—such as research or special projects—as well as the chance to be promoted to higher positions.
When developing the program, managers should start by determining the skills, character, personality, and experience that the succession job requires. For example, what is required to be a successful CEO in the company? Managers should detail the qualities that would be essential if the company had to replace its chief executive.
Planners should then repeat this process for several levels down in the organization. (Entry-level positions need not be examined for obvious reasons.) The descriptions of skills and qualities should include as much detail as possible.
The persons developing these descriptions should always remember that the “soft skills” are even more important than the hard skills in managerial positions. Being able to motivate and manage people would, for example, be necessary skills.
Another issue to consider when developing a success plan is the potential growth of the company. For example, factors such as whether the company will expand vertically or horizontally, and whether it will maintain its current path or branch out into new product areas, are critical in determining the type of person who would best serve the company in the future.
At this stage, planners should document what outside education and training will be required of executives as the company scales up one or two levels. Managers should determine whether this knowledge can be acquired in school, in training provided by the company, or from outside experts such as local police, the FBI, or the Department of Homeland Security. This is also the time to research the costs of these programs and decide whether the company will absorb the cost or will require ambitious employees to support their own educational growth.
Next, planners should create a series of organizational charts detailing the current chain of command; the chain of command anticipated in one or two years; and the chain of command that will be necessary in the next five to ten years. Using this data, the company should create a career development plan that can be provided to employees interested in advancement.
This plan should lay out the opportunities for employees to be mentored, if they so choose, and to be evaluated periodically. If possible, the plan should also detail training opportunities.
Someone in the organization should take on the role of counselor to the fast-track employees. This person should have both the management and employee perspectives in mind. This person should manage the career development portion of the company’s human resources program. The person chosen for this job does not necessarily need an HR background.
The major obstacle to a succession planning program is properly evaluating current employees for future careers with the company. For example, if a company has locations with one person or only a few people at a site with little supervision or management, it might be difficult to properly evaluate these employees. A solution is to find opportunities to bring these employees into headquarters for training. Although the company must pay them for their time, it will be worth it in the long run.
These opportunities allow the company to find out which people want to train for the opportunity to move into management. From that group, senior executives can select the most promising candidates for upper management. If a company provides employees with a clear career path, those who wish to rise to the top will work hard to acquire the additional experience, education, and skills described in the succession planning documents.
When selecting employees for fast-track training, managers should remember that not every person in a supervisory position is capable of rising to higher levels of management. The higher up the corporate ladder an employees travels, the more he or she is dealing with abstract, theoretical, marketing, and political activities rather than the day-to-day operation of the company.
For example, in one particular case, the CEO of one company died unexpectedly. The company’s board of directors elevated a vice president to the CEO position, bypassing several vice presidents with more seniority. Those not promoted were angry and thought the decision had been made due to favoritism. A consultant was called in to help mediate the situation. The consultant asked the group of executives to describe, in detail, what skills were necessary to rise to the top in their particular chain of command.
At the lower levels, including supervision and beginning management positions, they said that it was the years of experience that enabled almost everyone to be promoted successfully. However, as they continued this exercise up the chain of command, the members of the group realized that the higher the position, the less important the street skills, and the more important the personality and desire to deal with the press, the public, the customers, the financial community, and other executives.
After examining the situation, the executives realized that the person who had been promoted over them had always volunteered to write articles, deal with the press, meet with potential customers, and help negotiate the next loan. Through these and other efforts, he had acquired the skills necessary to become the CEO of this growing organization. Many of the other vice presidents expressed their distaste for these functions, preferring instead to remain involved in day-to-day duties.
Whatever the size of the company or the age or health of the CEO, it is never too soon to start a succession plan. It is always valuable to the productivity and morale of employees to create a career development plan for them. Dovetailing the career development plan with the succession plan provides exponential value to the company as well as to its employees.
ArLyne Diamond, Ph.D., owns Diamond Associates, a management consulting firm in Santa Clara, California.