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DONASIAN MBONEA
ID: 44132BHU52973
PhD in Human Resource Management
Essay on : Succession Planning Overview
ATLANTIC INTERNATIONAL UNIVERSITY
HONOLULU, HAWAII
February 2017
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TABLE OF CONTENTS ……………………………………………………………………..ii
1.0 INTRODUCTION...............................................................................................................1
2.0 LITERATURE REVIEW ON SUCCESSION PLANNING.............................................2
3.0 OBJECTIVES OF SUCCESSION PLANNING.............................................................4
4.0 SUCCESSION PLANNING PROCESS.........................................................................5
5.0 DISTINGUISH BETWEEN SUCCESSION PLANNING AND REPLACEMENT.....8
6.0 IMPORTANCE OF SUCCESSION PLANNING .........................................................10
7.0 CASE STUDY.................................................................................................................12
8.0 CONCLUSION................................................................................................................13
References ..................................................................................................................................15
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1.0 INTRODUCTION
Succession planning was first introduced by Fayol who believed if succession planning
needs were ignored, organizations would not be prepared to make necessary
transitions (Rothwell, 1994; 2000; 2002; 2010).Succession planning allows an
organization to prepare for the absence, departure, death, retirement or termination of
an individual. Steele (2006) argues that succession planning has been used as a
formalized method for dealing with changes in leadership for over fifty years. Originally
used to anticipate smooth transitions at the top level in organizations, it has evolved into
a process that many organizations view as a critical for key positions across functions
and levels. While operational definitions vary, the core meaning has remained the same
throughout the decades as the process of succession planning has evolved. Succession
planning has been defined as: a means of identifying critical management positions,
starting at the levels of project manager and supervisor and extending up to the highest
position in the organization. Succession planning also describes management positions
to provide maximum flexibility in lateral management moves and to ensure that as
individuals achieve greater seniority, their management skills will broaden and become
more generalized in relation to total organizational objectives rather than to purely
departmental objectives (Rothwell, 2010. p.6). Succession Planning is a systematic and
deliberate process of identifying, developing and tracking key individuals within the firm
to prepare them for assuming senior and top level positions in future. Succession
planning is a process used by small and large companies to provide for the future by
ensuring that employees are recruited and trained to fill key role in the company. The
company invests in current employees to take over key positions in the event of
downsizing in management personnel, retirement, or death. Through the succession
planning process; executives must recruit top employees, develop their knowledge,
skills, and abilities (KSA) and prepare them for promotions in more challenging positions
within the company.
The main objectives of this essay was to summarize the topic by defining succession
planning as a concept, Literature review on succession planning, objectives of
succession planning, process of succession planning, distinguish between succession
planning and replacement as well as importance of succession planning to organization
performance, review one case study on the topic. To achieve outstanding results using
succession planning, an organization must develop an effective and highly focused
strategy that centers on organizational excellence (Butler & Roche, 2002). .
2
2.0 LITERATURE REVIEW ON SUCCESSION PLANNING
This section covers the literature review of the existing research found in succession
planning.
Sambrook (2005) defined succession planning as “the attempt to plan for the right
number and quality of managers and key-skilled employees to cover retirement, death,
serious illness or promotion, and any new positions which may be created in future
organization plans”. Even though today’s definition of succession planning includes the
organization’s attempt to prepare for transition of all management positions (Rothwell,
2010),
Succession planning has been defined as: a means of identifying critical management
positions, starting at the levels of project manager and supervisor and extending up to
the highest position in the organization. Succession planning also describes
management positions to provide maximum flexibility in lateral management moves and
to ensure that as individuals achieve greater seniority, their management skills will
broaden and become more generalized in relation to total organizational objectives
rather than to purely departmental objectives (Rothwell, 2010 p.6)
Succession planning is a deliberate and systematic effort by an organization to ensure
leadership continuity in key positions, retain and develop intellectual and knowledge
capital for the future (Rothwell, 2010). It is argued that succession planning is no longer
limited to CEO and top managers, nowadays need to successor for every job in the
organization is evident, especially with more involvement of employees to the
organization and distribution of decision making to empowered employees across
organizations.
The work of Shen & Cannela (2003) described a form of succession planning within the
corporate environment. The authors analyzed the effect of relay succession planning on
the shareholder response. This article demonstrated that the devotion of resources to
ensure that management is prepared for turnover is directly proportional to shareholder
satisfaction. This research shows that the sudden death of a key executive can
negatively influence the shareholder wealth. This loss can be mitigated if a new
successor is put into place within a short period.
Bower (2007) and Davis (2008) point out that both insiders and outsiders have
strengths and weaknesses in entering new positions. Employees know the company
and its inner workings, but may not recognize the need for change. New ideas can
come from the outside, but many times these newcomers do not know the company
well enough to foster the changes needed. A report by Cutting Edge Information (Howe,
2004) reported that over two thirds of organizations do not currently have a formal
succession planning process; almost half of these organizations have no approach in
developing their next CEO (as cited in Succession Planning Facts and Fantasies 2005,
p. 5).
3
Lewis (2009) asks the question as to why more organizations are not instituting
succession planning if there are so many benefits. Succession planning has been
shown to boost employee retention leading to increased employee performance.
Planning decreases recruiting costs because recruitment can be completed during
periods of lowered stress, recruiting the “best” talent, not a body to fill a seat. He exudes
the importance of good talent planning set these organizations up for success, not
failure (p. 439). Recruiting talent from a local area may not meet the needs of the
organizations requirements. As Lewis notes, “we must realistically cast a wider net” (p.
443).
There are different ways of classifying and ranking the importance of positions within an
organization. Conlon suggests that the first step is to evaluate and decide which
positions are critical roles in a company (Conlon, 2008). Once the positions are
recognized as key,
Conlon (2008) separates these roles into one of the four following categories and
suggests that specific actions be taken by the organization regarding each role type:
Strategic: These functions are critical to driving the organization’s long-term competitive
advantage. Employees in these roles have specialized skills or knowledge. Action: Build
capability in these roles by hiring new staff or implementing targeted development.
Core: The so-called “engine of the enterprise”, these roles are unique to the company
and core to delivering its products or services. Action: Protect these roles by ensuring
the company will always have adequate capabilities through rigorous in-house
development.
Requisite: Although the organization cannot do without these roles, their value could be
delivered through alternative staffing strategies. Action: Streamline or outsource these
roles.
Non-core: People in these roles have skill sets that no longer align with the company’s
strategic direction. Action: Shed these roles. (p. 39)
Rothwell (2010) argued that Succession planning and management is usually
associated with preparing people for possible future promotions. In that sense, it is
linked to the possible future leadership needs of an organization. Traditional SP&M is
about getting people ready for promotion, for movement up the organization chart. It can
thus be understood as management succession planning because it usually prepares
people for assuming higher-level management responsibility. But there are alternatives.
When experienced workers leave the organization, they take with them more than
leadership skill or one pair of hands to do the work. In point of fact, experienced workers
also possess special knowledge about the way past decisions have been made and
why. That is called institutional memory.
Technical and professional workers—such as engineers, system analysts, accountants,
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and research scientists—also possess highly specialized knowledge about the nature of
an organization’s products and services. That knowledge is vital for future competitive
advantage. After all, it is rarely possible to communicate valuable information to the next
generation without knowledge of what came before it. When succession planning
focuses on transferring knowledge from more to less experienced workers, it can be
called technical succession planning to distinguish it from management succession
planning, which is focused on promotability. In addition, experienced workers have built
a social network of people who help them accomplish their goals. For instance, an
experienced salesperson may know just the right people in a customer’s place of
business to make a decision regarding a large sale. But a successor will not necessarily
know those people and may require years to establish a track record with important
social contacts. When succession planning focuses on transferring social relationships
or contacts from more to less experienced people, it can be called social network or
social relationship succession planning
Therefore, keeping a job filled with a qualified person can sometimes be challenging but
is necessary to ensure business continuity. Business continuity refers to the
organization’s ability to ensure that qualified employees are always available and in
place to carry out its surplus of job functions. Developing the potential for business
continuity is emerging as a priority.
3.0OBJECTIVES OF SUCCESSION PLANNING
Why is it Important?
As part of a broader human resource (HR) planning framework, succession planning is
just one strategy that can help or support the organization to address HR issues related
to: the ageing workforce, Increasing retirement, competitive labour markets, negative
net migration and shrinking population, Potential skill shortages, Internal competency
gaps, Immigration and employment equity.
In recent years, the number of retirements has begun to increase in many organizations
and this trend is expected to continue for the next several years. Losing the expertise of
experienced employees could significantly reduce efficiency, resulting in costly
mistakes, unexpected quality problems, or significant disruptions in services and
performance.
The objectives of succession planning are as follows; to identify and proactively plan for
critical work force positions, by developing a pool of potential successors and
encouraging a culture that supports knowledge transfer and employee development, To
implement a framework that identifies the competency requirements of critical positions,
assesses potential candidates and develops required competencies through planned
learning and development initiatives; ensure the continuity of leadership in critical
positions; retain and develop intellectual capital to support future growth; to encourage
and motivate high potential employees to aspire for advancement (Rothwell, 2010)
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4.0SUCCESSION PLANNING PROCESS
How to Start the Succession Planning Process?
A succession planning process is most effective when it is a “systematic effort that is
deliberately planned and is driven by a written, organization-wide statement of purpose
and a policy” (Rothwell, 2001, p. 23).
It is important to acknowledge that succession planning will vary slightly between
organizations. Different resources, different organizational designs and different
attitudes all mean that succession planning should be flexible and adaptable in order to
accommodate varying needs and achieve business continuity.
Figure: 1. Succession Planning Process (Source: Rothwell, 2010)
STEP 2:
Identifying competencies
STEP 1:
Identify Key/Critical Positions (current and/or future)
STEP 3:
Identifying and assessing potential Candidates
STEP 4:
Learning and development plans
STEP 5:
Implementation and evaluation
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Step 1 – Identifying Key/Critical Positions
A key position or occupational group can be defined in many different ways, but two
important criteria that should be considered are criticality and retention risk. A critical
position is one that, if it were vacant, would have a significant impact on the
organization’s ability to conduct normal business. The significance of the impact could
be considered in terms of safety, operation of equipment, financial operation, efficiency,
public opinion, and so on. Retention risk refers to positions where the departure of an
employee is expected (e.g. retirement) or likely (e.g. history of turnover). By examining
these criteria on a low-to-high scale, an organization can determine what positions
require short- or long-term planning. A gap analysis, as a part of workforce planning,
can also be an invaluable tool to identify key areas or occupational groups. Information
that may help identify key positions can include: Current and future strategic goals and
objectives, retirement forecasts, turnover rates, current and expected vacancies,
changes to existing programs and services and highly specialized function.
In addition to the analysis of criticality, retention risk, and other workforce data, it might
be beneficial to consider the following types of questions: What jobs, if vacant, have the
potential to prevent the organization from achieving goals and objectives? What jobs
have a direct impact on the public? What jobs would be difficult to fill because of
required expertise or because the exiting incumbent possesses a wealth of unique
and/or corporate knowledge? Is there a projected labour market shortage for relevant
job skills? Is there a need to plan for anticipated positions that do not currently exist?
Step 2 – Identifying competencies
All positions have a requisite set of knowledge, skills and abilities that are expected of
employees who are filling that function. Thus, knowing the competencies of a job is a
mandatory component of recruitment, serving as a general baseline to measure against
interested potential candidates. However, succession planning provides an opportunity
to review the competencies traditionally associated with jobs, particularly with respect to
current goals and objectives. Several ways to determine and develop required
competencies include: Reviewing job descriptions, advertisements, and relevant merit
criteria, Interviewing current and former job incumbents, Interviewing supervisors,
clients, and other stakeholders, Conducting focus groups or surveys, Reviewing any
existing development programs (i.e. leadership competencies), Reviewing
organizational values.
Although job descriptions offer a good starting point for the identification of
competencies, it is important to consider some of the other sources of information listed
above.
Current incumbents, for example, would have a good understanding of which
competencies are the most important to their job. Interviewing these people may reveal
knowledge, skills and abilities that are necessary for the job, but are not currently
identified in the job description. Given the practical scope of any job, valid identification
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of competencies is necessary for: Establishing minimum requirements for job success;
creating a baseline for assessing interested potential candidates; Identifying appropriate
learning and development opportunities.
Some questions to consider might include: What competencies or skill sets will be
required? What are the specific functional competencies that apply to a key job or
group? What are the gaps (competencies or skill sets not possessed by the current
staff? What competencies apply to all employees and groups? Are these competencies
aligned with the organization’s vision, mission and values? What strategies will be used
to address the gaps?
Step 3: Identifying and Assessing Potential Candidates
The key purpose of identifying and assessing employees against core job competencies
is to help focus their learning and development opportunities in order to prepare them
for future roles in the organization. Traditional approaches to succession planning have
the potential to result in a one-sided selection process – the organization identifies a key
position, and then executives select a high-potential individual for preparation or
training. Given the potential sensitivity around the decision-making process in these
situations, an employee might be advised about their prospective opportunity for
advancement in private. This process is not transparent and can negatively impact the
morale of other employees (including the person chosen for succession) and their
relationship with the organization. Modern approaches to succession planning suggest
that transparency and accountability are the best practices for an organization.
Recruitment in the public service is based on merit, fairness and respect, and these
concepts are maintained and supported by the succession planning process. To
demonstrate these values, succession planning must be: Objective and independent of
personal bias; Merit-based; Communicated to and understood by all employees; and
Transparent at all stages of the process
Under these circumstances, self-identification is a useful starting point to see which
employees are interested in leadership roles, career advancement or lateral moves that
might not be easily attained without focused training or other learning and development
opportunities. Several ways to solicit for self-identification include: Circulating an
expression of interest, employees discussing career goals and objectives with their
supervisor, developing an inventory of employee skills/competencies and careers
interests
Step 4 – Learning and Development Plans
Once the relevant candidates have been identified, based on their interest and potential
for success in a key position, the organization must ensure that these employees have
access to focused learning and development opportunities.
Some key points to remember when developing learning and development plans are:
Plans should focus on decreasing or removing the gap between expected competencies
and the current knowledge, skills and abilities of candidates, manage expectations –
modern succession planning is based on learning and development to fulfill employee
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potential, rather than merely filling a vacancy. There are a wide range of learning and
development opportunities to consider, which can include: Job assignments that
develop and/or improve a candidate’s competencies; Job rotations; and formal training
Ensure appropriate strategies are in place to support the transfer of corporate
knowledge to candidates for key jobs, which can include: Mentoring, coaching or job-
shadowing; Documenting critical knowledge; Exit interviews; and establishing
communities of practice.
Step 5 – Implementation and Evaluation
Evaluating succession planning efforts will help to ensure the effectiveness of the
process by providing information regarding: How the process operates – the relationship
between inputs, activities, outputs, and outcomes; Impact of the process relative to
stated goals and objectives; functional strengths and weaknesses; potential gaps in
planning and assumptions; Cost-effectiveness and cost-benefit
Planning to collect and assess these types of information will ensure that the
organization monitors its succession planning activities, appropriately measures
success, and adjusts the process accordingly given sufficient evidence. Some
evaluative questions for departments to consider might include: Have all key jobs been
identified and do they have succession plans? What is the impact of succession plans
on business continuity in key positions? Are successful candidates performing well in
their new roles? What is the impact of learning and development efforts? Are
employees ready to compete for a vacant key position? Is the candidate pool diverse
and reflective of employment equity values? What are the areas for improvement in the
succession planning process?
Therefore, once a succession plan has been established, monitoring its efficiency and
effectiveness will be essential. Thus, each succession plan should be developed within
an evaluation framework in order to measure progress and success, as well as provide
any evidence to support changes to the succession planning process.
5.0DISTINGUISH BETWEEN SUCCESSION PLANNING AND REPLACEMENT
Succession planning and management should not be confused with replacement
planning, though they are compatible and often overlap.
Succession Planning Vs. Replacement Planning
Succession Planning
At its most basic level, succession planning is a “deliberate and systematic effort by a
company to ensure leadership continuity in key positions, retain and develop intellectual
and knowledge capital for the future, and encourage individual advancement” (Rothwell,
2010). Succession planning is an organization’s proactive attempt to come up with a
brief plan of action to ensure continuity in business operations, at all levels of an
organization, by cultivating talent from within the organization through planned
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development activities. This means reviewing your strategic plan for the organization,
reviewing the capabilities of the human capital currently on staff and making a
determination of what additional development activities these individuals need to help
the organization move forward with the strategic plan.
Replacement Planning
On the other hand, replacement planning “is a form of risk management .The chief aim
of replacement planning is to limit the chance of catastrophe stemming from the
immediate and unplanned loss of key job incumbents” (Rothwell, 2010). Replacement
planning is the typical, what would happen if Johnny or Susie, who happen to be our
CEO, gets hit by a bus on their way to work. While this is an extreme example, the likely
scenario your company will face is the unexpected departure of an employee who is an
important contributor to a team, department and organization.
Replacement planning assumes that the organization chart will remain unchanged over
time. It usually identifies “backups” for top-level positions, as they are identified on the
organization chart, and stops there. A typical “replacement chart” will list about 3 people
as “backups” for each top-level position and will usually indicate how ready each person
is to assume the role of the current job incumbent while Succession planning, in
contrast, focuses on developing people rather than merely naming them as
replacements. Its goal is to build deep bench strength throughout the organization so
that, whenever a vacancy occurs, the organization has many qualified candidates
internally that may be considered for advancement
Therefore, Replacement planning is a process of identifying short-term or long-term
backups so that organizations have people who can assume responsibility for critical
positions during emergencies. Individuals identified as ‘replacements’ are not promised
promotions; rather, they are prepared to the point where they can assume a critical
position long enough for the organization's leaders to do a proper internal and external
search for a permanent replacement. It should not be confused with succession
planning, which focuses on developing a pool of people to consider for promotion, or
talent management, which focuses on attracting, developing, deploying and retaining
the best people. Using a case study approach, this article describes how one
organization used replacement planning as a means to raise and consider important
issues as a starting point for the eventual implementation of succession planning
(Rothwell, 2011)
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6.0IMPORTANCE OF SUCCESSION PLANNING
Why is this idea of succession planning so important?
Succession planning and management is important for several reasons: (1) The
continued survival of the organization depends on having the right people in the right
places at the right times; (2) as a result of recent economic restructuring efforts in
organizations, there are simply fewer people available to advance to the top ranks from
within; (3) succession planning and management is needed to encourage diversity and
multiculturalism in organizations and to avoid homo social reproduction by managers;
and (4) succession forms the basis for communicating career paths, establishing
development and training plans, establishing career paths and individual job moves,
communicating upward and laterally, and creating a more comprehensive human
resources planning system.
Succession planning and management is important for other reasons as well
Indeed, it ‘‘forms the basis for (1) communicating career paths to each individual;
(2) Establishing development and training plans; (3) establishing career paths and
individual job moves; (4) communicating upward and laterally concerning the
management organization; and (5) creating a more comprehensive human resources
planning system,6) to identify replacement needs as a means of targeting necessary
training, employee education, and employee development. In other words, Succession
planning becomes a driving force to identify justifiable needs. Training helps employees
meet their current job responsibilities; employee education prepares them to advance to
future responsibilities; and employee development can be a tool for individual
enlightenment, organizational learning, or competency acquisition. (Rothwell, 2010 p.16
& 21)
Every organization will have some form of job vacancy arising in future due to attrition or
people retiring from their jobs. However, it is important for organizations to continue to
function smoothly irrespective of losing such key employees performing key roles.
When organizations have a succession plan, it makes it easier for them to handle any
unforeseen attrition and prevents the organization from being greatly impacted by such
attrition.
Many organizations perform this type of talent management planning for senior
management positions so that losing a key leader would not disable the organizations’
regular functions. However, succession planning would be more effective if it is
performed at all levels in the organization instead of focusing only on the top
management.
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The benefits of succession planning are numerous:
It serves as contingency planning and keeps the organization well prepared for any
sudden attrition that may happen and reduces the impact of losing key employees to a
great extent, By insisting on succession planning, managers get to identify various skill-
sets among the team members and their strengths come to light, Also, employees who
are identified as successors based on the skill-sets they possess can be groomed well
to handle the relevant positions, and any skill-set that is lacking in the employee can be
developed by providing appropriate training and opportunities, employees get to have a
well-defined road map of their career and it serves as a motivation factor for them to
perform even better, employees who get to understand that their organization has future
plans for them, will tend to stay with the organization for longer time, Internal employees
already have a good understanding of the organization and its goals. Thus, it saves a
considerable amount of time and cost for the organization in hiring and inducting new
candidates for these positions, overall, it creates a very positive atmosphere within the
organization and leaves employees feeling extremely satisfied in terms of career
progress and highly motivated (Rothwell, 2011)
Therefore, the benefits of good succession planning include: a means of ensuring the
organization is prepared with a plan to support service continuity when the executive
director, senior managers or key people leave, a continuing supply of qualified,
motivated people (or a process to identify them), who are prepared to take over when
current senior staff and other key employees leave the organization, an alignment
between your organization's vision and your human resources that demonstrates an
understanding of the need to have appropriate staffing to achieve strategic plans, a
commitment to developing career paths for employees which will facilitate your
organization's ability to recruit and retain top-performing employees and volunteers, an
external reputation as an employer that invests in its people and provides opportunities
and support for advancement.
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7.0CASE STUDY
How Business Plans for Succession: Matching Talent with Tasks (Rothwell, 2010,
p. 377)
With 61,000 workers in more than ninety countries, Dole Food Company Inc. has talent
all over the world. Only a few hundred of those employees are in top management at
the 151-year-old company headquartered in Westlake Village, California, which
produces and markets fruit, vegetables, and flowers. Trouble is, Dole doesn’t have
comprehensive knowledge of which these managers are or what they can do.
To be sure, business-unit leaders know their own direct reports well—their strengths,
weaknesses, experience, and career goals. The problem is that these leaders have no
way to share that knowledge with other business units. If a key job opens up in North
America, the business-unit leader wouldn’t know if the perfect candidate worked in
another Dole unit in South America. Dole has no way to match its top managerial talent
with its executive needs. But that is changing. The highly decentralized company is
launching a succession planning process, supported by Web-based software, through
which Dole executives hope to rectify their inability to promote the best and the brightest
across the corporation. ‘‘We are looking to execute an organized process where we will
identify weaknesses and strengths of our people and build plans to deal with that,’’ says
George Horne, Dole’s vice president of administration and support operations. ‘‘We also
want to identify areas where we will need to bring in some people from outside to fill
some gaps at the top.’’
The case study highlight that Succession planning has grown more important since the
1980s and picked up steam in the 1990s. These days, experts say, most Fortune 500
companies take succession planning seriously, and many smaller companies embrace
it. Marc Kaiser, a consultant with Hewitt Associates in Lincolnshire, Illinois, says savvy
companies recognize that they must be prepared to tackle the leadership gap created
by retiring baby boomers. The ability to easily automate succession planning using the
Web also drives interest. ‘‘It is easier now, and that’s one reason people are doing it,’’
he says. Most companies that adopt succession planning automate it with software.
Nardoni estimates that 50 percent to 60 percent of the Fortune 500 and 30 percent of
the largest 2,500 U.S. companies have installed succession planning systems, either
standalone software or the succession-planning module in their HR management
system (HRMS). ‘‘Our average client starts with succession planning for between 150
and 250 positions. The minute you get above 50 to 75 positions, it becomes a pain in
the butt on paper,’’ he says.
Government agencies, such as the Federal Aviation Administration, also embrace
succession planning, Nardoni says, because they have to plan for people moving in and
13
out and retiring. However, the government’s succession planning initiatives don’t have
the same intensity as those of the Fortune 500, he adds.
Kaiser points to a 2002 Hewitt study, ‘‘Top 20 Companies for Leaders,’’ that shows that
companies with reputations as good places to work have stronger succession planning
and commit more resources to it, including the CEO’s time. Hewitt surveyed some 348
HR executives and CEOs at 240 publicly held companies on various leadership topics,
identifying companies that succeed in attracting, developing, and retaining leaders, and
noting the practices that influenced their success.
The analysis: The case study highlights that company take succession planning
seriously, which shows that companies with reputations as good places to work have
stronger succession planning and commit more resources to it.
8.0CONCLUSION
Succession planning has become one of the most significant human resource
management responsibilities within today’s organizations. Organizations must have the
right people in the right jobs at the right times. They cannot afford to be without people
who have the required qualifications and competencies to quickly fill a critical or key role
when the need arises. Given the current business environment for many organizations,
no one can afford to attract, invest in and then lose its high potential employees; the
best way to address these challenges is to maintain a viable culture and management
style which recruit, motivate, retain and develop potentially capable employees who can
remain in the driver’s seat of organizational excellences and performance.
The absence of a succession plan can undermine an organization's effectiveness and
its sustainability. Without a succession planning process, an organization may not have
a means of ensuring that the programs and services that are crucial to its operation are
sustained beyond the tenure of the individual currently responsible for them.
Also, this essay will help me to build an effective succession program in our
organization which will ensures that there are qualified and motivated employees (or a
means of recruiting them) who are able to take over when the executive director or
other key people leave an organization. It also demonstrates to stakeholders such as
clients, funders, employees and volunteers that the organization is committed to and
able to provide excellent programs and services at all times, including during times of
transition.
Therefore, it is very vital to link succession planning to business strategy to obtain need
kind of people with the needed set of skills for the future. However, this linkage has not
14
been achieved in real world even in organizations with best succession planning.
Management commitment like any other organizational–wide program is critical for
successful implementation of Succession Planning. Without the support, succession
planning is not executable even if design phase is done well (Rothwell, 2010).
15
REFERENCES
Bower, J. (2007). Solve the succession crisis by growing inside-outside leaders.
Harvard Business Review, 90-96.
Butler, K., & Roche-Tarry, D. E. (2002). Succession planning: Putting an organization's
knowledge to work. Nature Biotechnology, 20(2), 201-203.
Conlon, R. (2008). Planning for tomorrow. Human Resource Executive, 38-41.
Lewis, D. (2009). Who’s next? Succession planning paves the path to your
organization’s future. Biomedical Instrumentation & Technology, November/December,
438-443.
Nixon, J. M. (2008). Growing your own leaders: Succession planning in libraries.
Journal of Business & Finance Librarianship, 13(3), 249-260.
Rothwell, W. (2001). Effective succession planning. New York: American Management
Association.
Rothwell, W. (2010). Effective succession planning: Ensuring leadership continuity and
building talent from within. (4th ed.). New York, NY: American Management Association.
Rothwell, W. J (1994) Effective Succession Planning: Ensuring Leadership Continuity
and Building Talent from Within. New York: AMACOM.
Rothwell, W. J. (2011). Replacement planning: A starting point for succession planning
and talent management. International Journal of Training and Development, 15(1), 87-
99.
Rothwell, William J. (2005). Effective Succession Planning: Ensuring Leadership
Continuity and Building Talent from Within. 3rd Edition. New York: American
Management Association.
Sambrook, S. (2005). Exploring succession planning in small, growing firms. Journal of
Small Business and Enterprise Development, 12(4), 579-594.
Shen, W., & Cannella, A. A. (2003). Will succession planning increase shareholder
wealth? Evidence from investor reactions to relay CEO successions. Strategic
Management Journal, 24(2), 191-198.
Singer, Paula M. and Gail Griffith. (2010). Succession Planning in the Library:
Developing Leaders, Managing Change. Chicago: American Library Association.
Steele, P (2006) Succession Planning, White Paper (Revised), Regis Learning
Solutions.

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Succession Planning: Preparing for the Future

  • 1. i DONASIAN MBONEA ID: 44132BHU52973 PhD in Human Resource Management Essay on : Succession Planning Overview ATLANTIC INTERNATIONAL UNIVERSITY HONOLULU, HAWAII February 2017
  • 2. ii TABLE OF CONTENTS ……………………………………………………………………..ii 1.0 INTRODUCTION...............................................................................................................1 2.0 LITERATURE REVIEW ON SUCCESSION PLANNING.............................................2 3.0 OBJECTIVES OF SUCCESSION PLANNING.............................................................4 4.0 SUCCESSION PLANNING PROCESS.........................................................................5 5.0 DISTINGUISH BETWEEN SUCCESSION PLANNING AND REPLACEMENT.....8 6.0 IMPORTANCE OF SUCCESSION PLANNING .........................................................10 7.0 CASE STUDY.................................................................................................................12 8.0 CONCLUSION................................................................................................................13 References ..................................................................................................................................15
  • 3. 1 1.0 INTRODUCTION Succession planning was first introduced by Fayol who believed if succession planning needs were ignored, organizations would not be prepared to make necessary transitions (Rothwell, 1994; 2000; 2002; 2010).Succession planning allows an organization to prepare for the absence, departure, death, retirement or termination of an individual. Steele (2006) argues that succession planning has been used as a formalized method for dealing with changes in leadership for over fifty years. Originally used to anticipate smooth transitions at the top level in organizations, it has evolved into a process that many organizations view as a critical for key positions across functions and levels. While operational definitions vary, the core meaning has remained the same throughout the decades as the process of succession planning has evolved. Succession planning has been defined as: a means of identifying critical management positions, starting at the levels of project manager and supervisor and extending up to the highest position in the organization. Succession planning also describes management positions to provide maximum flexibility in lateral management moves and to ensure that as individuals achieve greater seniority, their management skills will broaden and become more generalized in relation to total organizational objectives rather than to purely departmental objectives (Rothwell, 2010. p.6). Succession Planning is a systematic and deliberate process of identifying, developing and tracking key individuals within the firm to prepare them for assuming senior and top level positions in future. Succession planning is a process used by small and large companies to provide for the future by ensuring that employees are recruited and trained to fill key role in the company. The company invests in current employees to take over key positions in the event of downsizing in management personnel, retirement, or death. Through the succession planning process; executives must recruit top employees, develop their knowledge, skills, and abilities (KSA) and prepare them for promotions in more challenging positions within the company. The main objectives of this essay was to summarize the topic by defining succession planning as a concept, Literature review on succession planning, objectives of succession planning, process of succession planning, distinguish between succession planning and replacement as well as importance of succession planning to organization performance, review one case study on the topic. To achieve outstanding results using succession planning, an organization must develop an effective and highly focused strategy that centers on organizational excellence (Butler & Roche, 2002). .
  • 4. 2 2.0 LITERATURE REVIEW ON SUCCESSION PLANNING This section covers the literature review of the existing research found in succession planning. Sambrook (2005) defined succession planning as “the attempt to plan for the right number and quality of managers and key-skilled employees to cover retirement, death, serious illness or promotion, and any new positions which may be created in future organization plans”. Even though today’s definition of succession planning includes the organization’s attempt to prepare for transition of all management positions (Rothwell, 2010), Succession planning has been defined as: a means of identifying critical management positions, starting at the levels of project manager and supervisor and extending up to the highest position in the organization. Succession planning also describes management positions to provide maximum flexibility in lateral management moves and to ensure that as individuals achieve greater seniority, their management skills will broaden and become more generalized in relation to total organizational objectives rather than to purely departmental objectives (Rothwell, 2010 p.6) Succession planning is a deliberate and systematic effort by an organization to ensure leadership continuity in key positions, retain and develop intellectual and knowledge capital for the future (Rothwell, 2010). It is argued that succession planning is no longer limited to CEO and top managers, nowadays need to successor for every job in the organization is evident, especially with more involvement of employees to the organization and distribution of decision making to empowered employees across organizations. The work of Shen & Cannela (2003) described a form of succession planning within the corporate environment. The authors analyzed the effect of relay succession planning on the shareholder response. This article demonstrated that the devotion of resources to ensure that management is prepared for turnover is directly proportional to shareholder satisfaction. This research shows that the sudden death of a key executive can negatively influence the shareholder wealth. This loss can be mitigated if a new successor is put into place within a short period. Bower (2007) and Davis (2008) point out that both insiders and outsiders have strengths and weaknesses in entering new positions. Employees know the company and its inner workings, but may not recognize the need for change. New ideas can come from the outside, but many times these newcomers do not know the company well enough to foster the changes needed. A report by Cutting Edge Information (Howe, 2004) reported that over two thirds of organizations do not currently have a formal succession planning process; almost half of these organizations have no approach in developing their next CEO (as cited in Succession Planning Facts and Fantasies 2005, p. 5).
  • 5. 3 Lewis (2009) asks the question as to why more organizations are not instituting succession planning if there are so many benefits. Succession planning has been shown to boost employee retention leading to increased employee performance. Planning decreases recruiting costs because recruitment can be completed during periods of lowered stress, recruiting the “best” talent, not a body to fill a seat. He exudes the importance of good talent planning set these organizations up for success, not failure (p. 439). Recruiting talent from a local area may not meet the needs of the organizations requirements. As Lewis notes, “we must realistically cast a wider net” (p. 443). There are different ways of classifying and ranking the importance of positions within an organization. Conlon suggests that the first step is to evaluate and decide which positions are critical roles in a company (Conlon, 2008). Once the positions are recognized as key, Conlon (2008) separates these roles into one of the four following categories and suggests that specific actions be taken by the organization regarding each role type: Strategic: These functions are critical to driving the organization’s long-term competitive advantage. Employees in these roles have specialized skills or knowledge. Action: Build capability in these roles by hiring new staff or implementing targeted development. Core: The so-called “engine of the enterprise”, these roles are unique to the company and core to delivering its products or services. Action: Protect these roles by ensuring the company will always have adequate capabilities through rigorous in-house development. Requisite: Although the organization cannot do without these roles, their value could be delivered through alternative staffing strategies. Action: Streamline or outsource these roles. Non-core: People in these roles have skill sets that no longer align with the company’s strategic direction. Action: Shed these roles. (p. 39) Rothwell (2010) argued that Succession planning and management is usually associated with preparing people for possible future promotions. In that sense, it is linked to the possible future leadership needs of an organization. Traditional SP&M is about getting people ready for promotion, for movement up the organization chart. It can thus be understood as management succession planning because it usually prepares people for assuming higher-level management responsibility. But there are alternatives. When experienced workers leave the organization, they take with them more than leadership skill or one pair of hands to do the work. In point of fact, experienced workers also possess special knowledge about the way past decisions have been made and why. That is called institutional memory. Technical and professional workers—such as engineers, system analysts, accountants,
  • 6. 4 and research scientists—also possess highly specialized knowledge about the nature of an organization’s products and services. That knowledge is vital for future competitive advantage. After all, it is rarely possible to communicate valuable information to the next generation without knowledge of what came before it. When succession planning focuses on transferring knowledge from more to less experienced workers, it can be called technical succession planning to distinguish it from management succession planning, which is focused on promotability. In addition, experienced workers have built a social network of people who help them accomplish their goals. For instance, an experienced salesperson may know just the right people in a customer’s place of business to make a decision regarding a large sale. But a successor will not necessarily know those people and may require years to establish a track record with important social contacts. When succession planning focuses on transferring social relationships or contacts from more to less experienced people, it can be called social network or social relationship succession planning Therefore, keeping a job filled with a qualified person can sometimes be challenging but is necessary to ensure business continuity. Business continuity refers to the organization’s ability to ensure that qualified employees are always available and in place to carry out its surplus of job functions. Developing the potential for business continuity is emerging as a priority. 3.0OBJECTIVES OF SUCCESSION PLANNING Why is it Important? As part of a broader human resource (HR) planning framework, succession planning is just one strategy that can help or support the organization to address HR issues related to: the ageing workforce, Increasing retirement, competitive labour markets, negative net migration and shrinking population, Potential skill shortages, Internal competency gaps, Immigration and employment equity. In recent years, the number of retirements has begun to increase in many organizations and this trend is expected to continue for the next several years. Losing the expertise of experienced employees could significantly reduce efficiency, resulting in costly mistakes, unexpected quality problems, or significant disruptions in services and performance. The objectives of succession planning are as follows; to identify and proactively plan for critical work force positions, by developing a pool of potential successors and encouraging a culture that supports knowledge transfer and employee development, To implement a framework that identifies the competency requirements of critical positions, assesses potential candidates and develops required competencies through planned learning and development initiatives; ensure the continuity of leadership in critical positions; retain and develop intellectual capital to support future growth; to encourage and motivate high potential employees to aspire for advancement (Rothwell, 2010)
  • 7. 5 4.0SUCCESSION PLANNING PROCESS How to Start the Succession Planning Process? A succession planning process is most effective when it is a “systematic effort that is deliberately planned and is driven by a written, organization-wide statement of purpose and a policy” (Rothwell, 2001, p. 23). It is important to acknowledge that succession planning will vary slightly between organizations. Different resources, different organizational designs and different attitudes all mean that succession planning should be flexible and adaptable in order to accommodate varying needs and achieve business continuity. Figure: 1. Succession Planning Process (Source: Rothwell, 2010) STEP 2: Identifying competencies STEP 1: Identify Key/Critical Positions (current and/or future) STEP 3: Identifying and assessing potential Candidates STEP 4: Learning and development plans STEP 5: Implementation and evaluation
  • 8. 6 Step 1 – Identifying Key/Critical Positions A key position or occupational group can be defined in many different ways, but two important criteria that should be considered are criticality and retention risk. A critical position is one that, if it were vacant, would have a significant impact on the organization’s ability to conduct normal business. The significance of the impact could be considered in terms of safety, operation of equipment, financial operation, efficiency, public opinion, and so on. Retention risk refers to positions where the departure of an employee is expected (e.g. retirement) or likely (e.g. history of turnover). By examining these criteria on a low-to-high scale, an organization can determine what positions require short- or long-term planning. A gap analysis, as a part of workforce planning, can also be an invaluable tool to identify key areas or occupational groups. Information that may help identify key positions can include: Current and future strategic goals and objectives, retirement forecasts, turnover rates, current and expected vacancies, changes to existing programs and services and highly specialized function. In addition to the analysis of criticality, retention risk, and other workforce data, it might be beneficial to consider the following types of questions: What jobs, if vacant, have the potential to prevent the organization from achieving goals and objectives? What jobs have a direct impact on the public? What jobs would be difficult to fill because of required expertise or because the exiting incumbent possesses a wealth of unique and/or corporate knowledge? Is there a projected labour market shortage for relevant job skills? Is there a need to plan for anticipated positions that do not currently exist? Step 2 – Identifying competencies All positions have a requisite set of knowledge, skills and abilities that are expected of employees who are filling that function. Thus, knowing the competencies of a job is a mandatory component of recruitment, serving as a general baseline to measure against interested potential candidates. However, succession planning provides an opportunity to review the competencies traditionally associated with jobs, particularly with respect to current goals and objectives. Several ways to determine and develop required competencies include: Reviewing job descriptions, advertisements, and relevant merit criteria, Interviewing current and former job incumbents, Interviewing supervisors, clients, and other stakeholders, Conducting focus groups or surveys, Reviewing any existing development programs (i.e. leadership competencies), Reviewing organizational values. Although job descriptions offer a good starting point for the identification of competencies, it is important to consider some of the other sources of information listed above. Current incumbents, for example, would have a good understanding of which competencies are the most important to their job. Interviewing these people may reveal knowledge, skills and abilities that are necessary for the job, but are not currently identified in the job description. Given the practical scope of any job, valid identification
  • 9. 7 of competencies is necessary for: Establishing minimum requirements for job success; creating a baseline for assessing interested potential candidates; Identifying appropriate learning and development opportunities. Some questions to consider might include: What competencies or skill sets will be required? What are the specific functional competencies that apply to a key job or group? What are the gaps (competencies or skill sets not possessed by the current staff? What competencies apply to all employees and groups? Are these competencies aligned with the organization’s vision, mission and values? What strategies will be used to address the gaps? Step 3: Identifying and Assessing Potential Candidates The key purpose of identifying and assessing employees against core job competencies is to help focus their learning and development opportunities in order to prepare them for future roles in the organization. Traditional approaches to succession planning have the potential to result in a one-sided selection process – the organization identifies a key position, and then executives select a high-potential individual for preparation or training. Given the potential sensitivity around the decision-making process in these situations, an employee might be advised about their prospective opportunity for advancement in private. This process is not transparent and can negatively impact the morale of other employees (including the person chosen for succession) and their relationship with the organization. Modern approaches to succession planning suggest that transparency and accountability are the best practices for an organization. Recruitment in the public service is based on merit, fairness and respect, and these concepts are maintained and supported by the succession planning process. To demonstrate these values, succession planning must be: Objective and independent of personal bias; Merit-based; Communicated to and understood by all employees; and Transparent at all stages of the process Under these circumstances, self-identification is a useful starting point to see which employees are interested in leadership roles, career advancement or lateral moves that might not be easily attained without focused training or other learning and development opportunities. Several ways to solicit for self-identification include: Circulating an expression of interest, employees discussing career goals and objectives with their supervisor, developing an inventory of employee skills/competencies and careers interests Step 4 – Learning and Development Plans Once the relevant candidates have been identified, based on their interest and potential for success in a key position, the organization must ensure that these employees have access to focused learning and development opportunities. Some key points to remember when developing learning and development plans are: Plans should focus on decreasing or removing the gap between expected competencies and the current knowledge, skills and abilities of candidates, manage expectations – modern succession planning is based on learning and development to fulfill employee
  • 10. 8 potential, rather than merely filling a vacancy. There are a wide range of learning and development opportunities to consider, which can include: Job assignments that develop and/or improve a candidate’s competencies; Job rotations; and formal training Ensure appropriate strategies are in place to support the transfer of corporate knowledge to candidates for key jobs, which can include: Mentoring, coaching or job- shadowing; Documenting critical knowledge; Exit interviews; and establishing communities of practice. Step 5 – Implementation and Evaluation Evaluating succession planning efforts will help to ensure the effectiveness of the process by providing information regarding: How the process operates – the relationship between inputs, activities, outputs, and outcomes; Impact of the process relative to stated goals and objectives; functional strengths and weaknesses; potential gaps in planning and assumptions; Cost-effectiveness and cost-benefit Planning to collect and assess these types of information will ensure that the organization monitors its succession planning activities, appropriately measures success, and adjusts the process accordingly given sufficient evidence. Some evaluative questions for departments to consider might include: Have all key jobs been identified and do they have succession plans? What is the impact of succession plans on business continuity in key positions? Are successful candidates performing well in their new roles? What is the impact of learning and development efforts? Are employees ready to compete for a vacant key position? Is the candidate pool diverse and reflective of employment equity values? What are the areas for improvement in the succession planning process? Therefore, once a succession plan has been established, monitoring its efficiency and effectiveness will be essential. Thus, each succession plan should be developed within an evaluation framework in order to measure progress and success, as well as provide any evidence to support changes to the succession planning process. 5.0DISTINGUISH BETWEEN SUCCESSION PLANNING AND REPLACEMENT Succession planning and management should not be confused with replacement planning, though they are compatible and often overlap. Succession Planning Vs. Replacement Planning Succession Planning At its most basic level, succession planning is a “deliberate and systematic effort by a company to ensure leadership continuity in key positions, retain and develop intellectual and knowledge capital for the future, and encourage individual advancement” (Rothwell, 2010). Succession planning is an organization’s proactive attempt to come up with a brief plan of action to ensure continuity in business operations, at all levels of an organization, by cultivating talent from within the organization through planned
  • 11. 9 development activities. This means reviewing your strategic plan for the organization, reviewing the capabilities of the human capital currently on staff and making a determination of what additional development activities these individuals need to help the organization move forward with the strategic plan. Replacement Planning On the other hand, replacement planning “is a form of risk management .The chief aim of replacement planning is to limit the chance of catastrophe stemming from the immediate and unplanned loss of key job incumbents” (Rothwell, 2010). Replacement planning is the typical, what would happen if Johnny or Susie, who happen to be our CEO, gets hit by a bus on their way to work. While this is an extreme example, the likely scenario your company will face is the unexpected departure of an employee who is an important contributor to a team, department and organization. Replacement planning assumes that the organization chart will remain unchanged over time. It usually identifies “backups” for top-level positions, as they are identified on the organization chart, and stops there. A typical “replacement chart” will list about 3 people as “backups” for each top-level position and will usually indicate how ready each person is to assume the role of the current job incumbent while Succession planning, in contrast, focuses on developing people rather than merely naming them as replacements. Its goal is to build deep bench strength throughout the organization so that, whenever a vacancy occurs, the organization has many qualified candidates internally that may be considered for advancement Therefore, Replacement planning is a process of identifying short-term or long-term backups so that organizations have people who can assume responsibility for critical positions during emergencies. Individuals identified as ‘replacements’ are not promised promotions; rather, they are prepared to the point where they can assume a critical position long enough for the organization's leaders to do a proper internal and external search for a permanent replacement. It should not be confused with succession planning, which focuses on developing a pool of people to consider for promotion, or talent management, which focuses on attracting, developing, deploying and retaining the best people. Using a case study approach, this article describes how one organization used replacement planning as a means to raise and consider important issues as a starting point for the eventual implementation of succession planning (Rothwell, 2011)
  • 12. 10 6.0IMPORTANCE OF SUCCESSION PLANNING Why is this idea of succession planning so important? Succession planning and management is important for several reasons: (1) The continued survival of the organization depends on having the right people in the right places at the right times; (2) as a result of recent economic restructuring efforts in organizations, there are simply fewer people available to advance to the top ranks from within; (3) succession planning and management is needed to encourage diversity and multiculturalism in organizations and to avoid homo social reproduction by managers; and (4) succession forms the basis for communicating career paths, establishing development and training plans, establishing career paths and individual job moves, communicating upward and laterally, and creating a more comprehensive human resources planning system. Succession planning and management is important for other reasons as well Indeed, it ‘‘forms the basis for (1) communicating career paths to each individual; (2) Establishing development and training plans; (3) establishing career paths and individual job moves; (4) communicating upward and laterally concerning the management organization; and (5) creating a more comprehensive human resources planning system,6) to identify replacement needs as a means of targeting necessary training, employee education, and employee development. In other words, Succession planning becomes a driving force to identify justifiable needs. Training helps employees meet their current job responsibilities; employee education prepares them to advance to future responsibilities; and employee development can be a tool for individual enlightenment, organizational learning, or competency acquisition. (Rothwell, 2010 p.16 & 21) Every organization will have some form of job vacancy arising in future due to attrition or people retiring from their jobs. However, it is important for organizations to continue to function smoothly irrespective of losing such key employees performing key roles. When organizations have a succession plan, it makes it easier for them to handle any unforeseen attrition and prevents the organization from being greatly impacted by such attrition. Many organizations perform this type of talent management planning for senior management positions so that losing a key leader would not disable the organizations’ regular functions. However, succession planning would be more effective if it is performed at all levels in the organization instead of focusing only on the top management.
  • 13. 11 The benefits of succession planning are numerous: It serves as contingency planning and keeps the organization well prepared for any sudden attrition that may happen and reduces the impact of losing key employees to a great extent, By insisting on succession planning, managers get to identify various skill- sets among the team members and their strengths come to light, Also, employees who are identified as successors based on the skill-sets they possess can be groomed well to handle the relevant positions, and any skill-set that is lacking in the employee can be developed by providing appropriate training and opportunities, employees get to have a well-defined road map of their career and it serves as a motivation factor for them to perform even better, employees who get to understand that their organization has future plans for them, will tend to stay with the organization for longer time, Internal employees already have a good understanding of the organization and its goals. Thus, it saves a considerable amount of time and cost for the organization in hiring and inducting new candidates for these positions, overall, it creates a very positive atmosphere within the organization and leaves employees feeling extremely satisfied in terms of career progress and highly motivated (Rothwell, 2011) Therefore, the benefits of good succession planning include: a means of ensuring the organization is prepared with a plan to support service continuity when the executive director, senior managers or key people leave, a continuing supply of qualified, motivated people (or a process to identify them), who are prepared to take over when current senior staff and other key employees leave the organization, an alignment between your organization's vision and your human resources that demonstrates an understanding of the need to have appropriate staffing to achieve strategic plans, a commitment to developing career paths for employees which will facilitate your organization's ability to recruit and retain top-performing employees and volunteers, an external reputation as an employer that invests in its people and provides opportunities and support for advancement.
  • 14. 12 7.0CASE STUDY How Business Plans for Succession: Matching Talent with Tasks (Rothwell, 2010, p. 377) With 61,000 workers in more than ninety countries, Dole Food Company Inc. has talent all over the world. Only a few hundred of those employees are in top management at the 151-year-old company headquartered in Westlake Village, California, which produces and markets fruit, vegetables, and flowers. Trouble is, Dole doesn’t have comprehensive knowledge of which these managers are or what they can do. To be sure, business-unit leaders know their own direct reports well—their strengths, weaknesses, experience, and career goals. The problem is that these leaders have no way to share that knowledge with other business units. If a key job opens up in North America, the business-unit leader wouldn’t know if the perfect candidate worked in another Dole unit in South America. Dole has no way to match its top managerial talent with its executive needs. But that is changing. The highly decentralized company is launching a succession planning process, supported by Web-based software, through which Dole executives hope to rectify their inability to promote the best and the brightest across the corporation. ‘‘We are looking to execute an organized process where we will identify weaknesses and strengths of our people and build plans to deal with that,’’ says George Horne, Dole’s vice president of administration and support operations. ‘‘We also want to identify areas where we will need to bring in some people from outside to fill some gaps at the top.’’ The case study highlight that Succession planning has grown more important since the 1980s and picked up steam in the 1990s. These days, experts say, most Fortune 500 companies take succession planning seriously, and many smaller companies embrace it. Marc Kaiser, a consultant with Hewitt Associates in Lincolnshire, Illinois, says savvy companies recognize that they must be prepared to tackle the leadership gap created by retiring baby boomers. The ability to easily automate succession planning using the Web also drives interest. ‘‘It is easier now, and that’s one reason people are doing it,’’ he says. Most companies that adopt succession planning automate it with software. Nardoni estimates that 50 percent to 60 percent of the Fortune 500 and 30 percent of the largest 2,500 U.S. companies have installed succession planning systems, either standalone software or the succession-planning module in their HR management system (HRMS). ‘‘Our average client starts with succession planning for between 150 and 250 positions. The minute you get above 50 to 75 positions, it becomes a pain in the butt on paper,’’ he says. Government agencies, such as the Federal Aviation Administration, also embrace succession planning, Nardoni says, because they have to plan for people moving in and
  • 15. 13 out and retiring. However, the government’s succession planning initiatives don’t have the same intensity as those of the Fortune 500, he adds. Kaiser points to a 2002 Hewitt study, ‘‘Top 20 Companies for Leaders,’’ that shows that companies with reputations as good places to work have stronger succession planning and commit more resources to it, including the CEO’s time. Hewitt surveyed some 348 HR executives and CEOs at 240 publicly held companies on various leadership topics, identifying companies that succeed in attracting, developing, and retaining leaders, and noting the practices that influenced their success. The analysis: The case study highlights that company take succession planning seriously, which shows that companies with reputations as good places to work have stronger succession planning and commit more resources to it. 8.0CONCLUSION Succession planning has become one of the most significant human resource management responsibilities within today’s organizations. Organizations must have the right people in the right jobs at the right times. They cannot afford to be without people who have the required qualifications and competencies to quickly fill a critical or key role when the need arises. Given the current business environment for many organizations, no one can afford to attract, invest in and then lose its high potential employees; the best way to address these challenges is to maintain a viable culture and management style which recruit, motivate, retain and develop potentially capable employees who can remain in the driver’s seat of organizational excellences and performance. The absence of a succession plan can undermine an organization's effectiveness and its sustainability. Without a succession planning process, an organization may not have a means of ensuring that the programs and services that are crucial to its operation are sustained beyond the tenure of the individual currently responsible for them. Also, this essay will help me to build an effective succession program in our organization which will ensures that there are qualified and motivated employees (or a means of recruiting them) who are able to take over when the executive director or other key people leave an organization. It also demonstrates to stakeholders such as clients, funders, employees and volunteers that the organization is committed to and able to provide excellent programs and services at all times, including during times of transition. Therefore, it is very vital to link succession planning to business strategy to obtain need kind of people with the needed set of skills for the future. However, this linkage has not
  • 16. 14 been achieved in real world even in organizations with best succession planning. Management commitment like any other organizational–wide program is critical for successful implementation of Succession Planning. Without the support, succession planning is not executable even if design phase is done well (Rothwell, 2010).
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