Succession management

Succession management
Succession management refers to the process of ensuring that pools of skilled employees are trained and available to meet the strategic objectives of the organization. It consists of two things; identifying the high potential employees and preparing them for future challenges. The ultimate test of good management is succession management - Drucker

Succession management (contd.)

So how does succession management work in family businesses ? Akij group vs. Eastern Housing Goldman sach vs. Gordon capital Even when retirements are predictable, succession management is still important. Most of the baby boomers would retire very soon........ Can your firm weather this vacancy ?

Reasons for succession management

Provide increased opportunities for highpotential workers; Identify replacement needs as a means of targeting necessary training, employee education and employee development; Increase the talent pool of promotable employees; Contribute to implementing the organization's strategic business plan

Reasons for succession management(contd.)

Help individuals realize their career plans within the organization; Tap the potential intellectual capital in the org; Improve employee's ability to respond to chaining environmental demands; Improve employee morale Cope with the effects of voluntary separation;

Evolution of Succession management

Replacement planning refers to the process of finding replacement employees for key managerial positions. Replacement planning has turned into succession management
Broadening the focus Expanding the time horizon; Creating a talent pool of replacement; and Improving the evaluation system

Broadening focus
In replacement planning the starting point is job, whereas in succession management the starting point is the strategy of the organization. More than promotable now (PN) and Ready with development (RD) Succession management believes that people have more than a single career within the organization Based on more than subtle future Think about BTCL

Time horizon
Replacement planning is all about immediate and short-term replacements Succession management is more concerned with long term replacements

Rating system
Traditional replacement planning is depended on the identification of the replacement people by a single rater, usually the supervisor. Succession management might involve more than a single rater and may even include 360 degree evaluation.

Talent pool
Neither employer nor employees can trust each other for rest of their lives. Globalization, high competitive pressure, environmental turbulence, de-layered organizations and new technologies have compelled to have a diversified and well equipped pool. Talent pool is a good description of the next generation of talented leadership because the term implies fluidity and responsiveness to the impact of forces.

Talent pool
Is it only internal pool or does it include external candidates as well ?

Talent pool choice

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SM process (contd.)
Identify the skills and competencies needed to meet strategic objectives
Job based approach Competency based approach If the job keeps changing, then does it make any sense to start with the job approach ?

SM process
Align succession management plans with strategy
For a firm going global what sort of competencies or skill do they require? What percentage of its current workforce can represent your firm in the world ?

Identify the skills and competencies needed to meet strategic objectives

SM process (Contd.)
Identify high-potential employees
Once the competencies are identified we need to find those in employees.
Temporary replacements: should the manager who fails to pick a successor be ever promoted? Replacement charts: usually done through performance appraisal; tend to focus on current strength and weakness, not a good match for a rapidly changing organization. Strategic replacement: more than just performance Talent management culture: why would a talented person want to be here ?

Talent management
Nearly one third of HR directors at topperforming companies constantly search for talented executives, compared to less than 10% at average-performing companies.
A winning company, which is characterised by growth and development; A big risk, big reward company, which offers great potential for advancement and compensation; A save the world organization, which is attractive to those wanting a mission; A lifestyle company where employees want flexibility and a good relationship with the boss.

Provide development opportunities and experiences

Are leaders born or made ? Branson vs. Harvard graduate Make or buy ? Barcelona vs. Real Madrid Management development methods:
Promotions: does it work for flatter org. ? Job rotations : More skill vs. Short run mentality and cost to learn new skills Special assignments: international assignment Formal training and development: formal university education Mentoring and coaching: more than counselling and coaching, involves psychological investment as well. 3M uses freedom for mentoring. Monitor succession management.

Provide development opportunities and experiences

Management development methods:
Promotions: does it work for flatter org. ? Job rotations :
More skill vs. Short run mentality and cost to learn new skills Can develop an area specialist through rotations Better job satisfaction Vulnerable to mistakes

Special assignments: international assignment

Mistakes must be tolerated

Formal training and development:

formal university education

Provide development opportunities and experiences

Management development methods:
Mentoring and coaching
mentors are executives who volunteer to coach, advise, and encourage junior employees. Coaches tend to be external members, usually paid counsellors from outside

Involved more than counselling and coaching, involves psychological investment as well. 3M uses freedom for mentoring. Monitor succession management.
How do you measure success of succession management?

Employee role in succession management

Have we shifted from psychological contract to return to explicit contract ?

Some other issues

Elitism : from hero to zero ? Risk of the spotlight: why reveal who is a star employee and risk of losing him/her ? Unpredictable future: pass the ball where not the player is, but where he is going to be Selection bias:
The criteria for selection is inappropriate and/or inadequate Various strategies of evaluation throughout the organization Rating errors