Succession planning is still critical in organisations; however it has evolved over the past 10 years where today succession planning is more about planning for the future and ensuring “Organisational Readiness”. Research at the Australian Graduate School of Leadership has identified the importance of organisations developing transitional and future structures. This is supported by the Maxumise strategic planning process that often identifies transitional structures that have quite different contributing elements (positions) to those that currently exits.
In modern Human Capital Management, succession planning is about “organisational readiness” and involves:
a) Managing the structure and knowing what the future and transitional capability needs are and what this will translate to in structure design (Strategic Planning);
b) Specifying the role/position descriptions which define the current and future contributing elements in the structure and
c) Determine the competency match between the current employees and the respective positions in the transitional structures.
Traditionally, succession planning is about employees being ready to fill, or at least apply for, positions that are, or may soon become, vacant in the current structure. Using this traditional approach, organisations find themselves focussing on maintaining the status quo rather than using succession planning as a key driver of business growth. These business growth drivers consist of firstly, the generic drivers that maintain the organisation on a steady state of growth whether from a competitive pricing, legislative change, product or service offering etc. Secondly, the deliberate growth or what is often referred to as interventional growth. This interventional growth is identified largely through a structured strategic planning process that incorporates generic growth as well as the interventional growth over the next 3 to 5 years.
Two (2) key outcomes of the strategic planning process are, firstly the performance framework and secondly the capability framework. Combined these provide the foundation for new strategies and new structures. The new transitional structures, together with the performance based strategies, allow the contributing elements to be specified i.e. role and position descriptions (roles are not yet assigned to the structure but when do they will become positions). The foundation for the succession planning or “organisational readiness” process is now in place. The Succession Planning that addresses “Organisational Readiness” consists of two (2) areas of development:
- Transitional readiness which prepares employees for new changes to their current position; and,
- Progression readiness which develops employees for future progression roles. This readiness process needs to take into account the transitional changes in the “progression role”; considering both the competence demonstrated and the potential of the employee to develop into the future position.
The competency matching of employees against a position specification, whether current or future, is used for recruitment, development assessment, succession planning and talent management. In the Maxumise approach the future contributing elements are referred to as roles and when these roles become an active component of a structure they become positions i.e. a contributing element with a location. When a recruitment or assessment is undertaken, the applicant or incumbent is normally just matched against the current position but it can also be as important that the potential of the candidate to grow into a potential future role is also assessed. This future role may represent the growth of a current position or represent a position in a future structure producing similar or very different outcomes.
Let’s share some real life examples where the future was very much different to the present:
A current structure in an energy supply company had both technicians and sales staff servicing the food and beverage department in the hospitality industry. The future structure merged the sales positions into the technicians’ position so the organisation could better meet the expectations of the client. The existing technicians where assessed and those who had the technical competence and demonstrated an appropriate level of customer commitment and relationship building competence were developed. The transition to the new structure was dependent on having adequate number of “Sales Technicians” and was implemented in 18 months.
A Teller position description in a large Australian wide bank was largely reactive with customer commitment and processing competence required. Management just decided “one day” that these positions had to become more proactive and provide defined advice to enquires, a level of selling of products and complaints handling with a level of authority. It was a disastrous start as no prior training was provided. A competency assessment of existing employees was subsequently undertaken. Just over 50% demonstrated the potential and desire to develop but the program took nearly 2 years to roll out with a commitment to significant coaching and mentoring before it was operating as expected.
Media organisations have traditionally found it difficult to make the transition from analogue and digital whether TV, broadcast or print. The new structures that enable this transition to be successful redefine a large proportion of the current positions, and while the collective outcomes are similar, the competence requirements are significantly different for the new positions. The re-training for the new positions crosses over a number of what have been considered “traditional media jobs”. A lot of issues derive from using the term “job”, especially as in the past the focus has been on the “job I do” rather than “what are the outcomes I can produce” … if trained properly. Generally we have found that those that can make, and who want to make the transition are between 40% and 50% of the original workforce. No it is not “all the young ones”, we have found older workers can also transition to the positions very quickly.
The critical position of CEO is to lead the organisational development and prepare for “organisational readiness” below them. If CEO’s are not developing their direct reports, they will compress those below them and constrain the growth of the overall organisation. Succession planning is often not considered when recruiting positions at CEO level or the executive team below the CEO. We have found Boards that do not want to consider the “CEO future” role design before it goes out for the head hunt even though the old CEO JD was outdated before the existing CEO was appointed and often the reason we are looking for a new CEO. This is not only a recipe for disaster for the new CEO but also for the executive team members below the CEO. In deliberate succession planning the executive team should also be assessed for their potential to develop firstly, in their own position and secondly, to a point where they can be serious contenders for the CEO’s position as well. Organisations prepared to revise the executive team position descriptions must also support and provide opportunities for this development. A large component of this development can be driven through the performance management system, empowering employees to use initiative and innovation in producing the outcomes. If the CEO and/or the executive team are not competent for their position (now or in the future) they will compress the organisation under them – we refer to this as the spring effect and it can ultimately destroy the organisation. A case study in the retail sector found only 2 out of 19 executives reached the competence of the new “ideal” positions descriptions.
When considering succession planning the transitional readiness phase may mean “my position is largely replaced by technology”. We can give many examples of this from senior management to laboratory scientists and technicians or for those with long memories typists and the computer age. A couple of examples are:
- The supply chain and store department in a sophisticated alkaloid extraction processing plant was headed by and executive team member and department consisting of 22 employees. Automation of the supply process and a new computerised store saw this diminish down to 5 Logistics Officers and at times the store received and dispatched goods with no-one in sight except the delivery truck driver in the cabin and bins zipping around receiving materials for the relevant departments. The transitional structure in this example was enormously different.
- Gold mining can be a fickly business with the fluctuations in gold price. A remote gold mining and processing site replaced all the PLC’s on site to a single make, and connected all the cabinets to a single control room. The plant employed many Electronic Technicians allocated to each area of the processing plant and with a title reflecting the PLC type. After the PLC upgrade the replacement of PLC’s was undertaken by tradesperson already allocated to the site with the appropriate training. While the range of competency for the tradesperson broadened, the level of complexity only increased marginally as did the base salary. A similar example is in a production plant in Australia where the PLC and other control points were monitored in France and the messages for pull-out and plug-in came together with the safety shut down and clearance to proceed. The work was completed by the shift control room attendants. In both these examples the transitional structures were significantly different to the traditional existing structures. In both examples production time increased dramatically although under very different structures.
Over the years Maxumise has assisted with a number of government reforms and business recoveries, including the mid 1990’s the Button car plan and restructuring of the vocational and higher education system. In the private sector we assisted with Sunbeam Victa, Kodak, battery manufacture, Kellogg’s and many others (sometimes with Government handouts). The issues were largely a lack of strategic foresight and ability to respond to change with the ultimate loss of the business and employment. Today we see a number of the same issues repeating themselves, especially the car industry and you have to ask what went wrong? A large amount of what went wrong is the lack of acceptance of the strategic change, new structures and new position definitions.
Maxumise Consulting Pty Ltd