The Future of Succession Management

(07703) Robert Fulmer and Jay Conger say:

The future of succession management looks very bright. The minset that talent is king or, in other words, that talent directly impacts the performance of an organization, is more widely accepted today than at any previous time. Succession management is well positioned to move to center stage as the way in which companies can gain and sustain a significant competitive advantage in the marketplace.

There are several emerging trends in business which will strengthen the transformation of succession management from a replacement tool to a business development and leadership tool. These trends are:

1. Greater integration and alignment
As succession planning becomes better integrated, it will move away from being viewed as an annual event to more of a day-to-day item. This integration will be enhanced by the availability of company-wide databases which positions succession planning as an integrated system rather than as a set of disconnected activities.

2. Succession planning will move away from the IT department to the desktop.
As web-based tools become available, succession planning will feel less like an event and more like something that is carried out weekly or daily. Continuous access to simple tools running on a personal computer rather than then corporate mainframe will enhance that perception and allow empoyees to take ownership of their own succession planning. Ulimately, employees should feel responsible for keeping their own resumes and other information up-to-date and current.

3. Assessments will become more rigorous and less subjective
As managers become more comfortable with assessment methodologies, there will be a move towards evaluating people more objectively. Techniques like 360-degree feedback will accelerate and strengthen this trend.

At the same time as succession planning is moving more to center stage, there are also some challenges on the horizon, specifically:

1. Some organizations will find it difficult to have available sufficient developmental opportunities
Senior roles within a company are generalized, yet many of the positions leading up to these roles are functional in nature. It will become increasingly difficult for potential managers to get cross-functional experience as more companies organize along product lines rather than by geographical areas. Increasingly, organizations will have to become more proactive in searching for management development roles.

2. There will be generational preferences impacting on succession planning
Generation X managers are far less inclined to accept positions overseas than were their Baby Boomer counterparts. In addition, many people are having children later in life. This means the next generation of managers will need developmental assignments that won’t require relocation. International opportunities or even turnaround assignments may not be as alluring in the future as they have been in the past.

3. There are still too many inconsistencies in selection and rewards
Too many organizations reward behaviors that meet the current needs of the organization while ignoring rewarding behavior that will meet the future needs of the organization. It’s human nature for succession criteria to become entrenched and lose relevance over time. Organizations need to be looking ahead rather than behind in ascertaining what kind of competencies will be valued in the future.

4. There is a danger of oversimplifying the complexities of leadership
Most succession planning is based on the competencies model — leaders should master the basic six or seven competencies and everything else will come together. This thinking is flawed. Leaders have a “X” factor that is mor than their collection of competencies. Succession planning needs to move more to providing experiences and challenges which build sound judgement and leadership capabilities.

5. 360-degree feedback loses its effectiveness when the results becomes public knowledge
Ownership of the data provided by 360-degree feedback is critical. If the data is used for personal develpment only, people are much more likely to take notice of what is suggested. Conversely, when the results of this tool are made public, it often becomes used as a tool to send a signal rather than provide strictly accurate data. Recipients start seeking favorable feedback rather than completely accurate feedback, which can create all kinds of problems and distortions. Or put bluntly, the more 360-degree feedback is used in succession planning, the less effective an assessment tool it becomes.

As in most areas of business, the key to succession planning lies in its implementation. A good succession planning system, supported by the CEO and senior business leaders, can pay long-term dividends. To achieve that, the system must not become too complicated or too bureacratic. Business unit leaders must find the system to be user-friendly and useful before they will get on board. The organization will need a strong HR department to serve as the coordinators of the succession management system. Realistic and consistent talent assessments must be fed into the system on an ongoing basis if it is to remain relevant. The recommendations genreated by the succession management system must be acted upon if it is to have any credibility. And the system must be upgraded and improved continuously to keep in sync with the evolving needs of the organization. Unless all these elements are in place, succession systems will never realize their full potential.

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