Introduction

In May 1990, Jim Henson, the creator of Kermit the Frog and the Muppets, died suddenly. This was devastating to Henson Productions because not only was Jim CEO, he also was the sole voice and puppeteer of Kermit. That’s when the lack of planning for his successor became a reality for Henson Productions. What would they do without Jim and Kermit? Who could be found to be another Kermit? How long will that take? Why didn't they plan for such a shock? Luckily, Jim's son could do the voice and was a puppeteer and Kermit was brought back to life.

Today many organizations are in a very similar situation to that of Henson Productions in 1990. Fortunately for Henson Productions, someone had a Kermit voice; however, it was a coincidence rather than a plan. It is important for organizations to remember that "Hope is not a Strategy" and begin to consciously consider how succession will work in the future for them.

In these days of rapid change, of mergers and acquisitions and of high growth, organizations often face a critical need to replace key management staff on very short notice. Coupled with increased pressure to remain competitive in a market where many skills and talents are in high demand and scarce; organizations have a need for competent, well-trained employees who are able to step into new roles at a given point in time. To meet this need, organizations are implementing succession plans that are systematic, integrated and flexible.

Overview

Succession planning should be part of the strategic planning process and should be tied closely to development and implementation of the business plan. Organizations must identify objectives and goals for long-term direction changes including growth and/or future development. Next, they must forecast staffing needs consistent with these objectives. Organizations need to ask themselves: where will the top executives of the future come from and who will be their replacements? Strategic planning helps recognize that future executives may differ strikingly in qualifications, characteristics and skills from today's leaders.

Succession planning identifies and grooms candidates for future openings in key positions due to loss of leadership, new markets or new environments. Succession planning is a part of a series of integrated human resources systems linking forecasting, recruiting, career planning and development, assessment and performance appraisal.

Purpose

The primary task of succession planning is to identify a sequence of personnel moves that prepare candidates for key positions. These candidates can be known in advance of actual need through the evaluation systems. Prior identification permits opportunities for mentoring and developmental activities to improve a manager's readiness to succeed to specific positions. It also provides concrete decision-making information needed to minimize the chance of poor choices or the adverse impacts of unplanned vacancies that can disrupt the continuity of management.

To examine the need to implement a succession plan, you only have to look at pro-sports and the farm club system. Just as a baseball club needs a good farm team and a basketball team needs a strong bench, an organization needs to have a succession plan. Farm systems identify, train and develop future stars. Although business issues and the people within organizations are more diversified and complex than a baseball team, organizations must understand that good executives are generally created, not born.

Goals:

The four basic goals of succession planning include:

• Identification of critical positions within the organization;

• Identification of future vacancies in those positions;

• Identification of individuals who would potentially fit into these vacancies; and

• Prepare those individuals to step into the vacancies as they occur

Identification:

In order for organizations to develop a clear list of positions that are strategically "key positions" and the recognized potential need, a structured look at the entire organization must be developed. A clear set of questions must be developed that lead organizations to the identification of critical and highly at risk positions. Only after this process can they begin to address what the priorities are and how they should be managed.

After the identification of positions, the organization must collect a significant amount of data related to the trends related to each of those positions including such concerns as difficulty of recruitment, forecast of skill needs in the future and turnover that has been experienced in those positions and in ones that are direct "feeder" positions. A "feeder" position is one the next leader will typically occupy until the opportunity comes to step up to the next level of leadership.

The identification step includes identifying the following:

• Leaders who are critical to the success of the organization (key positions)

• Feeder paths to the leadership position

• Skills necessary to be gained before the employee can move into the position

• Training, experiences and challenges necessary to hone the skills necessary to fill the leadership position

This is a time consuming process, but one that pays off with rewards for many years. The organization that successfully plans the careers of its top employees to get the most from them and provide the most opportunity is the one that is able to compete during times of tight recruitment and extreme change. The Return on Investment for a Succession Plan is easily demonstrated and clear. The cost of recruitment alone for many positions offers significant savings.

When employers recognize the inherent benefits of developing an integrated succession planning system that identifies the talent needed to continue a high level of leadership, they have recognized one of the greatest costs in their business environment – the loss of top talent. A truly integrated system includes all of the employee processes that determine appropriate fit:

• Recruitment

• Training & Development

• Performance Management

• Career Closure Assistance

Over the next few issues, TPO will explore these four parts of a succession plan, what role they play and some of the challenges and opportunities.

If you are already considering a Succession Plan for your organization, contact your TPO representative who can facilitate the process and provide that extra help you need to develop such a program.