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The possibility of a key player leaving prematurely, forces companies to accept that successors must be groomed, but can a UK professional recruiting firm help to do it and who should it affect?
Two highly important doctrines of succession management are the need for long-range planning, talent nurturing and the necessity to have plans that are possible to implement very quickly if needs be. Keeping rival candidates apart is also a necessity.
Succession planning is vital but very difficult in practice; consider the struggles FTSE-100 companies have had replacing CEOs. For example, is it necessary and realistic to identify a successor? Delegating the next candidate long before it is required can cause problems. Companies need to be careful in how succession is approached; the circumstances and implementation are critical. The most efficient practice is to have an extensive, global ‘talent pool’ containing possible successors for when the need arises.
At board level an organisation should work on developing its leaders, however difficult that may be. Statistics illustrate that CEOs brought in from outside lack endurance and effective relationships with top team members; however they have the advantage of a fresh insight.
Most companies realise that structures are flexible and that they are built around the people you have, to some extent. The talent pool should be regularly reviewed by an executive committee, considering who is available and who has been lost. Although this tedious exercise is often dodged, it is essential that the top group sits down once a year to examine the talent. It is financially more viable to produce your own talented people than to pinch someone else’s.
However, it is not necessary to plan for every eventuality as nobody expects a job for life. The company size must be considered; if you’re looking after the HR function in a business that employs 50 people, the chances are that you can see most of the talent pool by looking around. In contrast, if your company employs 50,000 people, you probably need to look a little harder.
There is not just one form of succession management. First, having an emergency plan for the sudden departure of the chief executive. Secondly there’s the more generic managerial talent-pooling ensuring that you have enough good people going forward. So, flexible talent pools with fast-trackers moving up, left, right, diagonally? Well, yes, for a lot of roles in companies this is undoubtedly a fine model. But what needs to be considered is what you would do if there was a crisis and if there are no disasters you need to ask yourself - ‘Who are we preparing for the future?’ Continuity must be ensured; some jobs are easily replaceable yet some are not.
The critical roles need to be identified by businesses, which are not necessarily high up. For example, although low-level, a call-centre operator could prove to be critical. Does your business have enough high-achievers to ensure its short, medium and long-term future? And are these roles replaceable? If you succeed in this then ninety five percent of your business will be fine, but what do you do at the very, very top?
It is most unadvisable to groom too many people for the top slot due to the inevitable competition and the difficulty of nurturing five or six CEOs who would rip each other’s throats out. Companies should be using a parallel approach; developing their own leaders, as well as looking outside before choosing. It might not be who's best for the job, rather who will be best in the future. Alien CEOs have mixed appeal, due to reasons previously mentioned, but a few companies have succeeded such as BP and Shell which are the exception.
It is this uncertainty that makes succession planning such a challenge. It can be equated to the Prime Minister being replaced; an average PM who inherits a booming economy during peace time is likely to be loved more than a brilliant politician who guides a nation as best he can through troubled times. You must also be aware that it is difficult to know how a candidate will perform once installed, and they will have limited time to learn on the job.
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