How Low Should Succession Plans Go?

Q: How far into the business should I go when creating our succession plan initiative?

A: Many business leaders and HR practitioners believe that succession planning is a complex process and a practice restricted to the largest organizations with the most sophisticated OD departments. On the contrary, succession planning can be of great value and benefit in smaller organizations with fewer resources available for knowledge management programs and the formal, structured development of employees.

Succession planning is the future-focused practice of identifying the knowledge, skills and abilities to perform certain functions and then developing a plan to prepare multiple individuals to potentially perform those functions. Because it is intended to “keep talent in the pipeline,” it is generally a 12- to 36-month position-specific (vs. person-specific) process of preparation, not preselection.

This is a different objective than career planning, which is an employee-centered practice of identifying the interests of the employee and assisting him/her along with personal development options that are consistent with those talents and interests. It’s also different from replacement planning—a shorter-term practice of identifying replacements for personnel in key operating functions.

Why do succession planning?

Top reasons for promoting succession planning include:

• Anticipated domestic demographics changes and the scarcity of true talent.
• Need for a tool to identify skill gaps and training needs.
• The criticality of knowledge retention in a knowledge economy.
• The effects on retention and morale from investing in employees.

Determining an organization’s motive for initiating a program will help create some of the program’s objectives and goals. For example, if it’s been determined that an inadequate labor supply is likely going to have a large impact, the direction of the plan will be decided by identifying those positions at greatest risk.

If the focus is on knowledge retention, then the succession plan initiative should be integrated with a knowledge management initiative that serves to identify, capture and archive information and promotes sharing of critical knowledge.

Choosing Positions

Identifying positions to include in a succession planning program is more of an art than a science as it is certainly an organization-specific process. There are some useful guidelines, however, that, interestingly, do not necessitate a high rung on the organization chart or a six-figure salary. For example, consider:

• Positions that are key to strategic goals or to the company’s competitive advantage (think hotel housekeepers who have the greatest impact on the consumers’ buying decision or an architect with specialized, uncommon knowledge in a restoration business).
• Positions that are organization-specific or in a particularly unique industry (e.g., roles in the judiciary system or technicians in titanium mining).
• Positions of influence within the organization (e.g., influencers of resource allocation or decision making).
• Jobs with lengthy learning curves (e.g., senior leader assistants, specialized equipment troubleshooters, contract negotiators).
• Positions where experiential learning is the key knowledge acquisition method (e.g., banquet chefs, home inspectors, case managers).

Issues to Consider

Regardless of its scope, a succession plan would likely be enhanced with the consideration of a number of factors. But overall, the organization’s readiness and the resources available may put boundaries on the scope of a new program.

Like most HR programs, succession planning cannot be performed inside a vacuum within the organization’s operations. Long before succession planning programs can be implemented, well-constructed foundation components, such as mission/vision/value statements, sensible organizational reporting structures and functional areas, well-designed jobs, established performance standards and metrics, effective on-boarding and assimilation programs, and on-going performance feedback mechanisms, should be in place.

There are certainly some areas of expertise and commitment that will improve the success rate of the program as well. Those may be present in human resources, OD and/or other leaders. Having the proper organizational culture (silo-free, receptivity to change, continuous learning and active performance management) is key to achieving program objectives.

Knowledge of job design concepts, effective performance management practices, training and development initiatives, the adult learner, mentoring programs, etc., gives the program coordinators a good foundation for a well-rounded program. Sensible job development requires that incumbent employees are suited for a series of positions that match individual talents with job-required tasks. A job analysis that reveals the knowledge, skills and abilities of each role allows for a mindful determination of practical succession steps.

Succession planning doesn’t just mean “up;” it can be used to fill positions laterally as well. This means job development should include cross training, job rotation, job enlargement and job enrichment programs. (Read the SHRM white paper Designing Organizational Programs for Employee Career Development.)

Planning the succession plan stages requires an understanding of job design concepts. This understanding of specific position attributes allows the program coordinator to acknowledge there is a relationship between incumbents’ success in the next job and their appropriateness for the role based on personal preferences. Specialization and task variety, task identity, task significance, autonomy, span of control, independence and interdependence plus job pace are all important position attributes to be considered.

Establishing standards (what success looks like) and metrics (how success will be measured) are critical for determining later on if the succession plan program has been effective. Determining in advance what will constitute a successful program may include finding methods to gauge the following criteria:

• Employee satisfaction with personal development.
• Management satisfaction with employee performance and job readiness.
• The extent of goals achieved and the time to full-function attainment.

The in-advance nature of succession planning significantly enhances the transition process for all parties involved. The employee and new leader and team have the opportunity to interact and develop a work style. There is also an overarching culture of employee development as an investment in the interest of the organization as a whole, as well as a practice of ongoing transitions and shared expertise.

As mentioned, succession planning cannot be accomplished as a stand-alone process. The paradigms that support succession planning also must influence selection processes as well as performance management practices. Identifying roles eligible for succession planning requires forethought during the selection phase so the right person with development potential is chosen. Future-focused performance management practices that highlight personal initiative, skill acquisition and development are most suitable. (Read the HR Magazine article Succeeding with Succession.)

The recordkeeping aspect of succession planning may cause the greatest trepidation. In larger organizations where succession planning may cross departmental, business unit or even substantial geographic boundaries, the collection and organization of data can be considerable. In the early stages, the administration of a succession planning program can be limited to:

• Portions of the organizational chart with the target positions identified.
• Informal charts showing skill complements and job design commonalities.
• Between target positions and potential feeder positions.
• Maintenance of summary skill set and interest “resumes” of incumbent candidates in something as basic as a spreadsheet.
• A Gantt chart of development assignments and program milestones for project planning.

Deciding the scope of the organization’s succession planning program is more a function of clarifying the program’s main goals, understanding available resources and honestly assessing organizational readiness rather than simply dividing up the organizational chart or choosing specific positions in isolation.

Charlotte H. Anderson, SPHR, GPHR, is president of the New Jersey-based organizational design and talent development consulting firm Amethyst & Iris and a member of the Society for Human Resource Management's Organizational Development Special Expertise Panel. She can be reached at Charlotte@AmethystandIris.com.