Research by the Society for Human Resource Management (SHRM) is drawing attention to the fact that competition for talented managers will get even tougher as baby boomers retire, with insufficient successors to replace them at the management level.
The study reveals that 75% of the surveyed executives consider succession planning as their number one challenge for the future. This is regardless of the company size, location or industry. Wayne Cascio, Chairman of the Board for the SHRM Foundation, said that the shortage of skilled executives who are being developed to succeed existing ones could threaten the ability of many organizations to achieve their long-term strategic goals. We are, without a doubt, experiencing a talent crisis.
Still, despite the fact that succession planning is recognized as a priority and critical component in long-term business planning, many HR professionals and business executives are not entirely sure how to address this challenge, and how to get the rest of the senior management on board.
Obtain Senior Management Buy-in
Any succession planning efforts must start with getting the senior management team to understand why this is such a critical issue and how it will affect the business, in the short-term and long-term. To drive the message home, look for research studies, anecdotal examples from your business and other businesses, positive and negative case studies, “what if” scenarios, and business implications that the senior management will easily relate to. This is a smart group and they will get it, but you have to speak their language, rather than the “HR” language.
Design a Clear Process
Now that you have obtained your senior management buy-in and they share your sense of urgency and passion for this initiative, proceed to create a succession planning process – a road-map, if you will – that is easy to follow, makes sense and clearly links human capital to business results and corporate objectives. Do not confuse a clear, easy to follow process with a superficial one. Your method for identifying high potential individuals should still be a robust practice.
Too often times, senior management proceeds to identify high potential individuals and ends up with strong, but ultimately average potential, individuals. To avoid this trap, you need to clearly define high-potential and who would be considered “successor worthy” material. Think short-term and long-term, review performance but also potential, discuss whether the individuals have the intelligence, knowledge, skills, aspiration, and motivation required to assume a senior management role in the future. Without a clear definition of talent and high potential, it is easy to forget what you are trying to achieve and end up with a list of names that are not necessarily worth investing in from a long-term perspective.
If your succession planning discussions uncover current or future talent gaps within your organization (as it often does), don’t be afraid to look for that talent externally. Start early (ideally, years before you will have a gap) and remember that networking is key, and many organizations identify their future CEO, CFO, or VP of Marketing through corporate and personal networks.
Develop and Retain Your High-Potentials
So many organizations forget that identifying high-potential individuals is just one side of the equation. The other side is developing and retaining talent. In fact, most of your time should be spent developing your talent, providing them with challenging opportunities, surrounding them with knowledgeable mentors and coaches, building their skill-set so that they are ready to assume more senior roles, when the opportunity arises. Managing expectations is also important. While you are developing your talent, it is not uncommon for the respective individuals to become restless and think they are ready sooner than they really are. It is therefore critical to continually provide them with new challenges and developmental assignments, while you give them timely and relevant feedback and feed-forward.
While succession planning at the top is undoubtedly critical for any future-oriented organization, don’t forget that succession planning is just as important below the senior management level. Your present junior and mid-level employees are your future leaders, and the same degree of attention must be given to identifying, developing and retaining them. This is especially the case with Generation Y employees who challenge the concept of long-term loyalty and require significantly more coaching in order to stay motivated and loyal in the long-term.