Most succession plans fail. In many cases it’s not because of a lack of trying. Management and human resources are investing more time in succession planning. But they treat succession planning as if time will stand still until they need to use it.
Here are my top 3 reasons why I believe succession planning is often a bust.
- Succession planning is focused on keeping butts in seats. That’s part of it of course. But if that’s all there was to it, then normal recruitment and retention strategies would minimize or eliminate any need to talk about succession planning.
- Most succession plans are static. They assume all other employees filling the boxes on the organizational chart will remain in place. They also assume consumer expectations and competition will remain the same. And they ignore the personal and professional desires of those employees waiting to move up or move out when better opportunities arise. Scenario planning (“what if…”)is a critical tool to use when designing succession plans.
- Succession plans focus on executive positions only. Key personnel, from the technician to the CEO, leave organizations all the time. Some reasons are voluntary. Others are involuntary. In either case, projects stop, customer expectations are missed, and opportunities are lost any time a skilled employee leaves an organization, no matter his/her title or wages. (Have you ever heard about a profitable HVAC company run without technicians or a hospital function without nurses? A company might continue for a time without a CEO but rarely can survive without employees to deliver a service.) The purpose of a succession plan is to minimize the bumps in the road when transitions occur, regardless of the position.
What can a company do to execute an effective succession plan?
- Think strategic. Better yet think forward. Instead of just focusing on boxes you move around on an organizational chart, think out 1 year, 3 years, and 5 years. What will the organization look like? Who will your competitors be? Which employees and managers will still be in place? Think “what if….?”
- Think scenarios. Anticipate. A succession plan isn’t another document you just save and file and then retrieve it when need it. It should be reviewed regularly (quarterly?). Every time a key employee leaves, review it. Ask “how will this vacancy impact other team members? What opportunities does it create?”
- Be proactive, not reactive. Many organizations took the recession and the slowdown of retirements by Baby Boomers as a time to take a deep sign and opportunity to postpone serious succession planning…again. Retirement can be postponed, not avoided (The State of Talent Management, Human Capital Institute). By 2012, the 55 and older segment of the workforce will increase 4 times the rate of growth of the overall labor force. You might also notice in “The Aging of the Population” image that the traditional source of successors (ages 45 to 54) for management positions is shrinking.
Whether retirements or terminations are voluntary or involuntary, it’s important to have a fluid pipeline of qualified candidates – internal and external – to flow into critical positions as they open. Succession planning is a key to company sustainability. Without it, you might just be the next opportunity your competition was looking for.