Succession Planning
SME’s are the classic New Zealand family run or owner operated business that entrepreneurial kiwi’s love. But not all of us want to work until we are 85; and our kids may not necessarily have an interest in taking over the family business - so what of succession planning? It may not even be as a result of retirement, it may be around business growth, having the right talent to fill key roles, and knowing the strengths and weaknesses in your workforce.
In today’s economic environment businesses are under constant pressure. Planning for the foreseeable future, along with developing a succession strategy for the long-term, is imperative. Many of the organisations that we work with are family-owned and operated businesses, where the extent of succession planning tends to exist around the expectation that family members will step in and take over. Often such expectations don’t come to fruition as it can be very hard for family members to step aside and ultimately “let-go” of the reins. Putting the time into planning now will make all the difference when a key staff member is lost or when it comes to a smooth exit from the business. No matter what the size of the organisation, succession planning can be tailored to fit the specific requirements.
A detailed succession plan should be considered as nothing less than due diligence. It is not a process created to baffle the uninitiated or the sole domain of large organisations, but rather a tool to focus on the quantification and utilisation of existing internal resources. By mapping your existing competencies you are creating a paradigm for future development, preparing for operational continuity and complimenting your employee retention and engagement strategies. It is an objective method of developing a plan to transition through change.
The approach taken to succession planning will often be governed by the size of your organisation. Small companies can take a less formal approach; management will already have a reasonable idea of who would slot into upcoming vacancies and whether by accident or design employees are more likely to be cross trained. As the size of the company increases the process inevitably becomes more complicated. Employees tend to become specialised and there is less personal familiarity with individual strengths and aspirations, so a more formal process may be necessary.
Regardless of size, there are some core key steps required to develop a succession plan:
Develop an Overview
Create a picture of your existing workforce, and assess the suitability of your current company structure. Is it relevant, will it work for the future or do you need to revise before progressing further?
Conduct a SWOT Analysis
Analyse your current talent strengths, weaknesses, opportunities and threats; identify areas of skill shortages, government regulation changes, economic and demographic variations that will feed into and further define your overview. Once you understand the parameters that you will need to work within you can start to drill down to more specific detail.
Define your needs
Determine the potential for retirements and attrition, identifying the key roles that you will need to cover. This will require the full use of your HR toolbox including the application of your researching skills, intuition and perhaps a little guess work.
Identify potential successors
Ideally you will identify two or more potential candidates for each key position. Critically and objectively assess each individual on multiple criteria to determine their future potential within the organisation. Look at their current competencies and aptitude, their career aspirations and what type of role will stimulate them to perform to the best of their ability. How does that fit with your needs? Remember that passion will always drive performance.
Conduct a GAP Analysis
Look to identify operational vulnerabilities, highlighting deficiencies in key competency areas both now and in the future. Where you have gaps you will need to consider how to fill these through future recruitment initiatives – hiring for potential rather than specifically for the role you need to fill in the moment.
Construct Individualised Development Plans
Once all the pieces of the puzzle are loosely placed it is time to start grooming each candidate developing people. Create individualised options for development; these may include the initiation of a mentoring or coaching programme, specific skills training, certification or professional registration, cross training and job rotation.
Implement
Once you have established a time line, a budget and secured the buy-in of the senior management team, it is time to put your plan into action.
Evaluation
Succession planning is not a set and forget process, but rather a fluid document that should be frequently reviewed and evaluated to ensure that it is meeting the needs of the company, having the right people with the right competencies in the right place at the right time.
The process may seem daunting; however having a plan in place has the potential to bring clarity to the overall picture of your human resources. It feeds into and draws on your appraisal process; links to your disaster management strategy; is a resource for training and development forecasting; aligns with your exit strategy, and compliments engagement and motivation initiatives. By taking the time to plan for the future you will inadvertently be building a more committed, versatile and high performing workforce for today.
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