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Sunday, November 21, 2010

Who Are Your "Next Generation" Leaders?

Research by Development Dimensions International (DDI), a global workforce and leadership training, staffing and assessment firm based in Bridgeville, Penn., indicates that companies are at risk to lose a substantial number of their executives within the next five years.

Companies are faced not only with the challenge of replacing existing managers, but the need to add new managerial staff. According to a recent hiring survey conducted by Management Recruiters International, Inc., mid-managers, executives and professionals are in great demand. More than half of the companies surveyed indicated that they are planning increases in their mid-management and professional staffs.

As the population continues to age and baby boomers begin leaving the job market, experts predict that there will be serious shortages of employees to fill high-level professional, managerial and technical spots.

Whether your replacement needs are the result of tragedy, transition or trial and error, considering the issue of succession now can help you accomplish these staffing changes smoothly, with minimal disruption to your internal processes and a seamless transition for your customers.

What can you do? You can implement a formal, well-organized succession-planning program designed to identify potential gaps and develop tactics for filling those gaps.

Succession planning is one of those "proactive" initiatives that many companies simply don’t have the time to undertake. After all, HR professionals are working as hard as they can to simply maintain a fully staffed and functioning workforce today. The problem is that, if organizations dont make the time now to address this issue, they will be hit with it head-on in the not-too-distant future. The burden will fall upon the HR staff to deal with vacancies and to recruit skilled employees from an ever-shrinking labor pool.

HR professionals are faced with a tough choice: "pay now or pay later."

Building a Successful Succession Plan


What does it take to build an effective succession plan? There are a number of keys to success:

1. Commitment from top management. Few HR professionals would argue that they could embark upon a successful succession-planning program in a vacuum. To be successful, top management must be committed to the need to have a formal succession plan in place and willing to commit the resources needed. How can you convince upper management that a formal succession plan is necessary? By developing and presenting a solid business case based on external and internal data. Numerous surveys have been done that clearly identify the impending shortage of talent. Data is available through national organizations like the Bureau of Labor Statistics. This data, accompanied by internal data, can help build a case for succession planning.

2. A vision. What skills will your organization need 5, 10, 15even 20years from now? Your vision can be well focused if you take the time to examine workplace trends, projections for graduates in various fields, etc. Take time, as well, to speak with the leaders of your organization about where it is heading and the skills employees will need in the future.

3. An accurate understanding of your existing workforce. Do you know how many of your employees will be eligible for retirement within the next five years? How many of your managers? Do you have any idea how many mid-level staff people might be ready, willing and able to step into those positions? When you look at the technical gaps that your organization will face, can you identify existing staff with the existing knowledge, or the potential, to fill those gaps? Do you have this information "in your head" or in a database that can be accessed at will by anyone with the "need to know"?

4. Objectivity. As you examine your workforce, focus on key positions, regardless of the traits of the incumbents. For example, if one of the key positions for your organization is that of product development manager, and the incumbent is a very loyal 30-something who you feel "will be with the company forever," you may feel that slot is "safe." That’s a dangerous assumption. As difficult as it may be, you need to realize that your loyal employee could always be lured to another job, could decide that corporate life is no longer what s/he wants or, even more tragically, could die or become disabled and unable to fulfill the requirements of the position.

5. An open mind. Too often succession planning focuses on "the cream of the crop" those employees who, for whatever reasons, can clearly and readily be identified as "up and comers." Youre limiting your potential if you stop with these employees, however. Sometimes hidden talents can be found in the most retiring or "invisible" workers. Some employees may self-identify; others may need some encouragement. Your succession plan should include education of existing staff so they understand where the gaps will be and are in a better position to step forward and say: "I would be interested in doing that."

6. A solid plan and strong organization. Succession planning is, in many respects, a numbers game. It is an analytical process that requires good organizational skills, attention to detail and the ability to project into the future. Your plan should be designed to capture the information you need, store that information and allow for the ability to manipulate the information so that you can generate reports, develop "what if" scenarios and make changes as your workforce and your projected organizational needs change.

7. Teeth. One of the primary barriers to successful succession planning is your existing managerial and professional staff. Managers may feel threatened when asked to participate in identifying the leaders of the future. This is just one of the reasons that the succession plan must belong to the organization and not to the HR department. Upper management must hold all managers accountable for identifying talent among their staff members even to the extent that their individual pay and promotion opportunities are tied to their success in identifying and developing future talent.

8. A well-coordinated training and development program. If your organization determines that it will need employees who are skilled in e-commerce and determines that this talent does not currently exist, you are left with two choices: recruit talent from outside or develop opportunities for interested existing staff with identified potential to learn the skills they will need. Once gaps have been identified, the next step is to determine how those gaps will be filled either through recruitment or development of existing staff. That development might involve in-house training, special project assignments, outside coursework, etc.

9. On-going attention. As we’ve already seen, it can be tempting to overlook the need for succession planning in the face of more immediate needs. Again, the involvement and ownership of this issue by top management can help keep it at the forefront of the organization and ensure that it has the ongoing attention and action that it deserves.

Mistakes that Companies Make

There are a number of mistakes that organizations may make as they embark on a succession planning program. Following are some key areas that can create problems and hamper succession planning efforts:

Keeping the plan a secret. How many promising employees do you think you’ve lost to competitors because they had no idea you had them in your sights as "promising"? The more you can involve the entire organization in your efforts, the more successful you will be.

Underestimating the talent within. Why is it that we frequently overlook the talent that we have within our organization in favor of recruiting from a vast pool of unknowns? An old management credo says, "An expert is someone who lives 50 miles away and carries a briefcase." Consider how many of your employees may be considered expert by the competition in the next town (or on the next block). Do you really want to risk losing them?

Narrow-minded thinking. Overlooking employees who are thought to be too old, too young, too rough around the edges or too different.

Focusing exclusively on hard skills. Organizations are finding that soft skills (popularly referred to as emotional intelligence) are often more important in determining an employees success than the more traditional hard skills or technical abilities that we tend to value. Consider organizational culture and teamwork needs in addition to technical requirements when building your plan.

Not offering appropriate training and developmental opportunities. Don’t leave employees and their managers to fend for themselves in building their skills. Make sure that training is part of your program and that the appropriate resources are available.

Expecting employees to self-identify. Identification of employees with potential to fill future needs is a joint responsibility between the organization and its employees.

Not holding managers accountable for succession planning. Don’t let managers thwart organizational succession-planning efforts because of their own insecurities and biases.

Considering only upward succession. Lateral succession may be a need in your organization as well. In fact, many companies have dual career paths. The hierarchy gets decidedly smaller at the top. But that shouldn’t hinder the ability of employees to grow and develop or your organizations ability to attract and retain employees with growth opportunities.

Developing a one-size-fits-all program. Offering generic leadership development programs is an ineffective way to deal with succession planning. Individual succession plans should be developed based on specific organizational needs and specific individual skill and training gaps.

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