Succession Management: Lessons to Be Learned from Growing Economies

By Pamela Babcock Oct 25, 2011

Rising economies facing explosive growth play a key role in shaping the talent landscape in their regions and around the world and researchers are now focusing on what there is to be learned from other countries’ staffing approaches, particularly when it comes to succession management.

“It is becoming clear that the need in the rising economies to accelerate the scope and scale of talent management systems is not only nice to have but a critical business imperative,” Roland B. Smith, a senior faculty member and lead researcher for the Global Institute for Talent Sustainability of the Center for Creative Leadership (CCL), said in a recent SHRM Online interview. “What is common across cultures and between East and West is that leaders are not clear on their individual role, nor on the impact they can personally play in cultivating and leveraging the next generation of leaders,” he added.

Smith said organizations that take “an asynchronous approach” to succession management will fare best. These companies build their talent and succession infrastructure while focusing on enhancing individual leader and collective leadership behaviors that will lead to top talent development and talent sustainability.

CCL plans to focus on the rising national economies of Brazil, Russia, India and China (BRIC), as well as South Africa, in its upcoming research, Smith told attendees of a Conference Board succession management conference held in New York City, Oct. 19, 2011.

“We have a unique opportunity to learn from other players,” he said. “Sometimes we get pretty insular in our thinking, and some of those frontiers where we can learn new or next practices are right in front of us.”

Out of India

CCL research into succession planning in India is under way; a report was expected to be published in late 2011. The study is being conducted with the Indian School of Business. The effort is being led by Prasad Kaipa, CCL’s former H. Smith Richardson Visiting Fellow and now a visiting professor at the school.

During the New York conference, Kaipa noted that many home-grown Indian businesses are seeking to double, triple or quadruple revenues over the next decade, if not sooner. Companies are beginning to show great interest in leadership development, and corporate India is increasingly investing in leadership training and development, he said.

“Succession planning is not new to India,” Kaipa said, noting that early writings about selecting a king contain references to what today is succession management. “But in recent times, there has been a lot more discussion about [it, and it] is something that has become very big.”

Kaipa cited a May 2011 BusinessWorld article: “Problems of succession in corporate India run much deeper, all the way down to even smaller firms. And there are no easy fixes.”

Best Practices—Where Some Stand

CCL expects formal studies of other countries to begin in 2012, with a comprehensive report slated for release by the end of 2012, Smith said. He said all organizations, especially those that do business in rising economies or that are in a rising economy, are focused on “scalability and speed,” while managing risk as much as they can—particularly the risk of “accelerating people through positions where they may not have as much experience.”

Smith provided attendees insights into emerging economies based on succession management best practices from an April 2009 Bersin & Associates and CCL report titled High Impact Succession Management. The study includes surveys and interviews with 220 senior HR leaders responsible for succession planning and management, 25 senior business executives and succession management leaders, and 100 business leaders who evaluated their companies' succession management strategies. Among these executives’ recommendations:

Facilitate a process-driven system. Many organizations in rising economies face the challenge of having to develop their HR infrastructure and systems “at the same time they have a huge need to develop succession systems,” Smith noted. “Where we would tell most organizations that they need to walk before they run, these organizations are running while they’re running. And it’s a pretty difficult task.”

Promote a transparent process across the enterprise. Transparency “is not as easy a sell, and it’s not that easily embraced, in some of these rising economies,” Smith noted. Align the talent management strategy with the business strategy. “Because of the demand for talent and leadership in rising economies, they’re forced to look at this almost from a risk standpoint,” Smith said. “And we need to help them more effectively develop leadership that’s tied with strategy.”

Ensure executive commitment and engagement. Executives might think that they’re having conversations about talent and succession but “talent doesn’t perceive it that way, and that’s very true in these rising economies as well,” Smith said.

Create a culture of sharing talent. In many rising economies, expatriates return home or go to a different home, as happened in Russia with talent from India. Many Russian organizations are now saying, “We need to invest aggressively in developing our talent internally,” Smith said.

Integrate with the talent management process. “We find in rising Western organizations, and definitely in rising economies, the competencies to hire are not even aligned with the competencies to develop,” Smith said.

Recognize technology as an enabler. Smith said that many Western organizations spend “huge dollars” on sophisticated HRIS platforms only to find that “they don’t yield what they want.” Rising economies are no different. Many are investing millions of dollars in HRIS platforms without doing their homework. “They get really frustrated,” he said.

Pamela Babcock is a freelance writer based in the New York City area.


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