HCP Conversations Knowledge Series: Who’s Next? Passing the Baton of Success! (Part 1)
What is the value of succession management and what are the key steps to make it work for you?
In the second of the Human Capital Partnership Programme (HCP) Conversations Knowledge Series – Who’s Next? Passing the Baton of Success! – we explore the value of succession management, what makes it work and how Human Capital Partners (HCPartners) engage in succession management to pave the way for continued success of the organisation’s future. This article is the first instalment in this two-part article series.
Performance Management as a Starting Point
In the previous webinar on performance management, we discussed the importance of an organisational culture that facilitates employees’ success in the future in making your performance management process work. In this aspect, performance management becomes a natural point to start the conversation on succession management – as an outcome of open discussions and performance conversations on plans for growth opportunities and learning.
The Value of Succession Management
Succession management is about planning for your organisation’s future by
- Meeting the demand for agile innovative leaders: Workplaces today demand such leaders who are equipped to perform and thrive in larger and more complex environments.
- Developing and retaining key talents: Ensures employees have the opportunity to develop and the best people are placed in positions of influence.
- Building a healthy internal pipeline: To adopt a strategic approach in developing and rotating talents across business units to maximise total shareholder returns.
- Retaining valuable institutional knowledge: Maximise the benefits of the sharing and passing on of tacit knowledge.
The research study on HCPartners showed that SMEs understood the value of succession management to enhance their ability to differentiate themselves in the war for talent, with succession management being one of their most mature human capital (HC) practices, i.e.
- Prioritising/developing leaders from the internal workforce before looking externally.
- Demonstrating commitment towards developing local internal talents to succeed senior leadership.
With employees knowing they have a customised career pathway and a supportive organisation willing to invest in their learning and growth, it further retained existing high potential employees.
4 Key Steps in Succession Management
The HC implementation toolkit encapsulates key learning points from the research study, with a 4-step implementation plan to develop a succession management plan that fully supports your business objectives:
Step 1: Form a talent council and identify critical positions.
Form a talent council that ideally involves senior management and HR. The talent council identifies the Critical Positions within the organisation.
Step 2: Analyse the success profile of critical roles.
Elaborate on the identified critical positions and determine key differentiators.
Step 3: Identify and build a leadership pipeline.
Establish the criteria to be considered a successor, using a consistent method to assess potential successors. Ideally, a pool of successors form 10-15% of the total organisation’s population. Consider incorporating a people development KPI to hold managers accountable for developing their subordinates to overcome potential manager resistance towards building this pool.
Step 4: Develop and track progression for potentials.
Create a holistic plan with the goal of preparing them to assume such critical positions; and follow and document their progress. Focus the outcome not on the certainty of succession, but rather training and cultivating a pool of potential successors to stay prepared for changes outside your control.
In the long term, succession management strengthens the overall capability of the organisation by building the right competencies and skills necessary for business continuity; and developing individuals to meet future business needs – regardless whether they are in a leadership role yet. And for your succession management plan to succeed, it is important to foster a sense that keeping talent within the organisation, wherever they may migrate, is the goal.
Download the Human Capital Implementation Toolkit here to get started on your succession management journey to stay prepared and plan ahead.
Look out for the next instalment in this two-part article series.