succession planning : need of the day

SUCCESSION PLANNING: NEED OF THE DAY

You grow a business from scratch and you would not like it go under after you are not handling it. Businesses make a fine legacy to have aren’t they? Who can’t remember Succession of Ratan Tata by Cyrus Mistry? Was it a finger snapping decision? A big No. Cyrus mistry was groomed to take the Position. In this age of multinationals, succession planning becomes more important than ever. First of all what is succession planning? In layman, it is enabling the smooth transition from one person to another for a specific job, or group of persons in case of expansion. Let’s define it: Succession planning is a strategy for passing each key role within a company to someone else in a way that company continue to run smoothly after incumbent leader is no longer in control. In understanding there is just one word which makes the difference between layman and standard definition: strategy.

Strategy entails the evaluations of the skills, identification of the potential replacements inside and outside of the company. From there on the plot differs, for the internal replacements training is the step forward. But in case of outside the company various other factors come into play company values, work culture etc. A hit leader in a company can’t be same success story in another company. That’s why in todays’ world of share market where company can lose a lot due a loss of faith in company by buyers. This makes the need of succession planning even more important.

For the succession planning every company has a succession plan with some names on the paper. The question is whether it can be operational or not?? With HR being in sync with the vision and strategies of the company can create a functional succession planning in tune with talent management program of the company. This practically ensures that employees have developmental opportunities to fine-tune their leadership skills and guarantees a greater chance at success for the succession planning program.

Some of the important things to keep in mind when making the succession planning roadmap are:

v  Stars vs. All: Some focus on the employees who give the best ROI, some on all the employees. With less people we can focus more as in the case of stars, but doing so we alienate a lot of people who resent special treatment to some and it cause low morale. So obviously the better way is to take into consideration all the employees.

v  Internal or External: Developing a leader is a tedious job so take a shortcut and bring an already tested leader simple isn’t it?? But the past studies has clearly shown that internal leaders are far more successful than external with exceptions in case of company changing its direction and in case of shorter duration. Else internal development of the leaders is the way to go.

v  Diversity: In the present people always seek similar people for mentors or protégé leading to common thinking all around the office which can have negative impact on the growth of the company. That’s why diversity plays a crucial role in the development of the company and is a must figure in the succession planning.

v  Alignment of the talent management with the succession planning: From a strategic point of view, Company always try to encourage cohesiveness among the workers and also try to formulate a proper channels for the developmental program for the employees which promotes the retention. And if it is done in the accordance with succession planning need for external searching for leaders can be reduced significantly.

v  Syncing of HR with Company strategy: Clarity in the terms for Future objectives and the way company is going to pursue it will help in succession planning.

Till now we have talked what points should be considered in making the succession plans. And now will talk about the Factors affecting the succession planning.

v  The first point should be the establishment of the Business goals of the owners. This allows the HR policy makers to shift their policies accordingly.

v  Transfer of management responsibility: Especially in family businesses children take over from their family, in that case proper evaluation of the children become necessary as it will help in finding the weaknesses and allowing the company a chance for hiring a specialist to support the leader.

v  Retirement goals: It starts with how much time the leader is going to remain active in day to day operations. It helps in framing a timeline for the succession planning.

v  Target date and contingency plans: Dates are important as it takes time to formulate all the details for the succession. And the in case of any fluctuation from the plans the contingency planning see to it that business runs as smoothly as ever.

Talking about the succession planning in Indian context, it is almost in sync with global world. That planning exists on paper not in practice as much. External hiring is very high which clearly shows that they don’t build the leaders internally. But awareness among the Indian companies are growing about the need of succession planning. The proper implementation here faces several challenges such as: Not having a standard measure for the evaluation of the internal and external candidates. There is also a lack clear strategy regarding the present and future performance. In case of multinationals low understanding of the local geography also contribute towards the faulty succession planning. Talent management body of the companies are also showing lack of intent on the internal leader building processes which contributes towards not so successful succession plan.

Keeping all the above in mind, we have to understand that to create leaders we will have to take bets and chances. We will have to stick with the people and support them as down the line it look fancy to have the technical terms which evaluate the people, at end of the people scoring high on the parameters can perform low and vice versa making it more important to have the succession planning in the tune with company’s future.