Happy New Year! I hope 2013 was a great year for your business.
There are many exciting developments in the Newfoundland economy with mega-projects, supporting businesses, and spinoffs. This new economy brings many benefits. With this success has also come human resource challenges for employers and business owners. We are currently faced with having more positions available than people to fill them, requiring skill sets that are more complex, and competing for talent globally. I have heard many employers share concerns like, “I don’t know where the talent I need is going to come from” and “If… fill in the name of your best employee here!…quits, we are in serious trouble”. Sound familiar? If so, make it your 2014 New Year’s resolution to increase your business success by implementing a succession plan.
What is a succession plan? In the 3rd edition of Effective Succession Planning, William Rothwell explains it this way: Succession planning is an integrated, systematic approach to identify, develop, and retain talent for key positions and areas in line with current and future organizational plans. Succession planning is a sound, emerging human resource and business development tool. The following steps outline the process to ensure you have the right people with the right skills in place to ensure your business will achieve its goals.
Know your business vision:All good plans start with the end in mind. What is your dream for your business? Craft that dream into a short, inspirational vision statement. How do you plan on reaching that vision? Roll those thoughts into a mission statement. What are the values of your company? Values guide behavior and communicate to your employees how you expect them to do their jobs. A company’s vision, mission, and values are both beacons and anchors for every activity, including human resource development.
Gather Information: There is a myriad of information that will inform your succession plan. First, identify your key and critical positions. These are the positions that keep you up at night because if this work is not done, your business could be seriously compromised. When these positions are identified, the next question to consider is your back up plan: If the incumbents suddenly won the lottery, how would your business manage? Along with identifying key and critical positions, you will also need to review the anticipated retirement dates of your staff along with any other potential losses to staff. This is typically a “best guess” that will inform your succession plan. It will also be important to review any unusually hard to fill positions through recruitment data. Finally, are there positions that do not currently exist that will be required for future success? Compiling this data will give you a good understanding of your strengths and potential risks.
Identify High Potential Employees: Now that you have a good assessment of your human resource needs and challenges, how will you identify the employees that have the potential to achieve the vision for the business? Organizations do this in different ways; some have an open, formal nomination process, others review performance development reports, while still others have private conversations with potential succession candidates. The identification of these employees is largely dependent on the size, structure and culture of an organization. It is critical is that the employee is informed and agrees to engage in future development. One common denominator among those you will select will be their engagement and support for the vision, mission, and values of your business.
Develop High Potential Employees: When the employees have been identified, succession planning requires a development plan that will support their success. This plan is created from an overview of the person’s current skills and the skills/knowledge required in the future. Many organizations also include core skills for all succession candidates such as leadership and organizational knowledge. Opportunities for development are numerous and could include workplace coaching, working with a mentor, specialized skill development, attaining a certification, and networking with senior management.
Monitor Your Plan: Once your research, identification and development of high potential employees is completed, it is imperative to monitor your plan for its effectiveness. Regularly review positions to ensure development plans are being completed. Track the movement of high potential employees through the organization, and continually evaluate the success of your plan. This work is usually done by a high level, small working group.
Putting together an organizational succession plan requires a concerted effort and time. The rewards for this effort can be significant including:
- Reduced organizational risk and ensured business continuity
- Reduced stress and cost resulting from an unexpected departure of a key employee
- Retention of high potential employees by providing career development opportunities
- Becoming a more attractive employer to job seekers interested in career development
- Strategic and effective use of employee development funds
- Achieving your current and future business goals
If succession planning is not part of your business resolution for 2014, I encourage you to put it on your management meeting agenda early in the New Year. Every best wish for a successful 2014!
Lynn Best is the Owner and Principal Consultant of CreAction Consulting Inc. Her company supports businesses achieve their goals through people development. Find out more about Lynn on LinkedIn.