There are certain activities in life that you know you need to do, but you hate doing them. Tax returns, renewing car insurance, booking your annual check-up with your GP, next year’s budgeting process, annual performance reviews, to name but a few.
However, should succession planning belong on this list? Most of you who read this blog are in the retail sector. Like in so many businesses, after the cost of goods, the payroll cost is often the 2nd highest area of expenditure on the P&L. We are a people centric industry and succession planning (the preparation to replace one leader with another) can be one of the most difficult challenges a business has to deal with.
If the successor is appointed from an external source than that could have a negative impact on the morale of the relevant team – were none of them good enough to take a step up? Why not? Why don’t we receive the appropriate training and development? Do I need to leave this business in order to gain promotion? Etc, etc.
An internal appointee on the other hand can boost morale (one day, I too, could be promoted), whilst without the proper preparation, it could be a nightmare scenario for the newly appointed manager who now has to lead the team of previous peers.
Of course, the right thing to do is to appoint the most qualified individual in the role – be that an internal or external candidate – whilst creating an environment where individuals receive continuous training, mentoring and development to make them excel in their current role and in doing so, preparing them for the next step in their career. By definition, not everyone can be promoted, so you will see some good people leave your organisation. However, the positive outweighs the negative in most cases and your mentoring culture can make a huge difference to your Brand as an employer.
The theory to this is all well and good, however I have found that in smaller organisations the focus on the daily, weekly and monthly performance of the business is such that setting real time aside to plan succession, is a luxury they can ill afford. Succession planning in these organisations is more of an ad hoc activity by the manager of the team. More often than not, one person is recognised as a high performer and as a result is earmarked to be the next leader. However, without the proper training, development and mentoring the success of this appointment is at best 50/50.
Strictly speaking, the process of succession planning needs to be standardised throughout the business, needs to be driven, monitored and administrated by HR and needs to be recognised in the business as a desirable process to be part of.
By following the following steps you’re half way there to have an effective succession planning culture:
- Analysis of the future
Succession planning needs to be closely linked to the business plan, in order to be a meaningful process. So the first stage involves looking at the future goals and strategies of the organisation for the next few years, identifying the key job roles that are critical to the success of the business, and identifying what talent is required at managerial or executive level.
- Analysis of jobs
Once key job roles for the future are identified, the next stage is to pinpoint the key managerial competencies – skills, knowledge and attributes – that will be necessary within those roles. Job descriptions, person specifications and competency frameworks.
- Analysis of people
This involves performance management processes already in place, however they need to be closely aligned to steps 1 and 2 – performance reviews against objectives and competencies. Some areas of knowledge or attributes might be difficult to measure or identify. Psychometric and ability tests or occupational personality questionnaires could help you make these assessments.
Besides looking at individuals’ potential, you also need to take into account their career aspirations, preferences and limiting factors.
- Analysis of training, learning & development needs
The key is to develop specific development plans for individuals, so that they are geared towards reaching a certain level of capability, rather than just ad hoc activities. What do we expect individuals to do differently or better in order to deliver the organisation’s future vision? What is the skills gap?
Opportunities, secondments, working parties and projects that ‘stretches’ the individual and takes them out of their comfort zone. Instructed with clear objectives and supported by reviewing and mentoring. Obviously, the more input the individual has in this process, the more successful it will be…
- Making the appointment
Having done all the groundwork, the objective is to have the right people, with the right skills, knowledge and attributes, in the right positions at the right time.
And actually, if the above practise is part of the company culture and modus operandi, then when at times an external person is appointed, it should be clearly evident that this individual had the skills and attributes no one else in the business possesses. Hence reducing the negative impact of making an external appointment.
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