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Human resources : Next in line

Every Issue

Cite as: (2003) 77(8) LIJ, p.91

The development of a succession plan is important for organisations which want to increase management depth and ensure their longevity.

Establishing a plan to fill management positions is imperative for organisations that face sharply escalating recruiting costs and a shrinking pool of available talent. Twenty years ago succession plans were merely replacement tools in the event of sudden death or resignation.

In the past decade, how ever, corporate downsizing, external recruiting of talent, reduced budgets and demo graphic trends have exacerbated the leadership short age for many organisations, challenging traditional succession planning activities.

Today, succession planning requires more than just an organisational chart showing who holds what job within the comp any. Best practice organisations employ succession-planning techniques as a way to increase management depth and ensure longevity for the organisation.

Succession planning can also be an extremely powerful tool in motivating and retaining top leadership.

Every organisation is different and each must develop a succession plan that fits its specific needs.

Typically the process requires several steps that lead through the design, development and implementation of the succession plan.

For organisations new to the succession planning process, it is important to start with a simple replacement plan. A chart that shows two to three people to fill each position and what you need to do to get them ready is useful.

The first stage of any successful succession planning process is to determine the extent of the organisation’s pending leadership short age by projecting retirements and attrition over the next five years.

The results will inevitably reveal higher than expected turnover and a reduction in the talent pool from which new leaders will emerge.

The second stage is to determine the organisation’s critical success factors and values and challenges it is expected to face in the next five years.

This will assist in better understanding the strengths and weaknesses that particular individuals within the organisation possess, what is required to fill the gaps in skills, and how to train workers appropriately for the future longevity of the company.

The most important stage is the identification of high-potential candidates through current job performance and feedback from peers, subordinates, clients and supervisors, along with external assessment.

This often occurs through the creation of a leadership profile for the organisation. The leader ship profile will be a set of core competencies used to measure the skills of the current talent pool and develop employees to create future leaders in the organisation.

Key characteristics or criteria often used to identify high-potential employees include the following:

  • business effectiveness;
  • communication;
  • decision-making ability;
  • flexibility;
  • leadership effectiveness;
  • learning capability;
  • motivation;
  • personal effectiveness;
  • risk-taking ability;
  • strategic thinking;
  • teamwork effectiveness;
  • technical skill; and
  • workforce diversity.

The next stage is to establish individual development plans for each high-potential individual that include training, job rotations, special assignments and mentoring by senior staff.

Recruiting methods should be adopted that match personnel requirements and future needs. Staff should be selected based on job performance, experience and assessment of potential.

Finally, the process needs to be evaluated and audited so that career paths are followed and management gaps are continually identified.

In order to increase the visibility and importance of succession planning organisations should consider tying their succession process to other developmental practices within the organisation such as:

  • diversity initiatives;
  • leadership development; reward and recognition programs; and
  • staffing practices.

Succession planning is an ongoing process rather than an event that must be addressed every year or two.

More and more organisations are recognising the value of succession planning and are taking it beyond organisational charts.

They are using it as a comprehensive change-management tool that helps them to identify gaps in talent and to fill those gaps more effectively.


DIANNE UNDERWOOD is the Institute’s human resources manager.

hrcolumn@liv.asn.au

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