If business continuity is not currently an imperative goal of your business, it should be. However, achieving the resilience required against any organisational disruptions requires forward planning in what is also known as succession management.
What is Succession Management?
Succession management is the process of identifying positions important for business continuity in the organisation and creating a talent pipeline, by preparing suitable employees to potentially take over as predecessors retire or move on. Succession management is more than career planning, whereby the focus is more on the individual’s development. However when both are done well, it allows organisations to reap the benefits of having a mid to longer term horizon for planning career transitions for critical positions. Once the potential leaders are identified, structured career planning is key to ensure that individuals are prepared for future leadership roles.
Key roles and talents should first be identified in planning an organisation’s talent succession pipeline. Factors such as retirement, promotion, or even resignation of employees in these roles should also be considered. Through the different stages, decisions must also remain transparent and fair to maintain trust from all employees involved.
The process of selecting these individuals in a defined and measurable way are seen here:
The Importance of Succession Management for Businesses
As the Covid-19 pandemic has shown, workforce planning is crucial to business continuity beyond simply adjusting business strategies when situations arise. The continuity of roles essential to the business have to be taken into consideration for companies to not only survive, but grow. It has been observed that top talents tend to contribute more to an organisation’s output, and as such investing in succession management will also boost the company’s production output. Succession management is a process that requires time, and starting it as early as possible would be ideal to prepare organisations for any unforeseen changes or challenges. A duration of about five years should be sufficient otherwise, with the final year in the timeline dedicated to ensuring a smooth transition into the role for the incumbent.
The Cost of Poor Planning
As with essential business processes, there are consequences if succession planning is not done, or done well. As seen in the United States, poor management of transitions in C-suite roles of S&P 1500 companies cost an estimated US$1 trillion. When the financial stability of organisations is at risk, its continued business operation can also be threatened.
That does not mean that the focus should only be on C-suites, however. Succession management should be carried for roles, beyond C-suite level, essential for business continuity.
Identifying Talent Pool Through Analytics
To ensure that this process is fair and open, the method of selecting the talent pool is crucial. It should not be one that is influenced by human emotions or impressions, but should be backed by data analytics.
With the numerous tools available ranging from personality to psychometric assessments, modified return on investment (ROI) of individuals, or even sales targets, there are many methodologies available to organisations. How can we best make use of data to shortlist the talent pool then? With predictive analytics for example, historical data such as employee traits and behaviours can be measured to identify employees who best fit these key roles. Furthermore, the availability of data can be leveraged, along with the company’s performance management system. As such, it then boils down to how organisations select the most appropriate analytics tools to use to support the identification of the high-potential talent pool as part of succession management.
Engaging Talent Pool Throughout the Process
It is not just the shortlisting of candidates, but also engaging them in conversations is necessary to understand their individual goals and career aspirations and assess the fit to be part of the talent pool for further development. The process requires commitment from both employee and employer. The focus of career planning is to prepare the candidates for their future role(s), with both the organisational and individual goals aligned.
Responsibility for Implementing Succession Management
While employees can take charge of their career planning, the human resource (HR) team of an organisation functions as the custodian in succession management ― responsible for providing both the framework and methodology. The HR team should not function alone; it should be supported by the organisation’s management as they are the key stakeholders responsible for identifying the suitable pool of key employees and participating in the grooming of these talents. The implication is that management stakeholders should also have the right skills and knowledge to participate in the process, whether as coaches or mentors.
Succession Management Resources Available
TAFEP’s Human Capital Implementation toolkit for succession management is a guide for organisations who are keen to implement succession management. In line with, and further to these guides, TAFEP also organises conversations with HCP partners and representatives from TAFEP as part of an ongoing series of panel discussions on the various human capital dimensions. In one of the panel discussions for TAFEP in February 2022, aAdvantage director Jacqueline Gwee joined in the conversation on the value and steps of succession management and the challenges involved (watch the video recording of the session here). Ensuring continuity is a primary consideration for businesses, and succession management is one of the few integral processes that not only helps to retain the current knowledge pool, but it also reduces disruptions to key workflows. As a result, employees maintain a high morale, which also benefits the organisation as it cultivates a healthy and strong culture. Organisations need to be aware of the key roles to plan for, skill sets desired in potential candidates, and tools available to help streamline the shortlisting process. Start your organisation’s succession planning today ― contact us for more information on our solutions available.
For more resources, refer to TAFEP’s guides here.
Jacqueline Gwee, Director and Founder, aAdvantage Consulting Group Pte Ltd
Jacqueline is Director and Founder of aAdvantage Consulting. She has over 25 years of broad-based human resource, change management and business excellence consulting experience in both the public and private sectors. Prior to founding aAdvantage Consulting, Jacqueline was with the consulting practices of Big 4 consulting firms focussing on organisational development and change management. Jacqueline has advised companies on best practices in organisational development and how human capital strategies align to support business success. Jacqueline currently leads the Research & Insights, Human Capital & Culture Transformation Solutions within aAdvantage Consulting.