360° Coverage : Succession Planning Is Every Leader's Job

2 Updates

Succession Planning Is Every Leader's Job

Apr 23 2014, 4:59pm CDT | by

Though most companies conduct some sort of succession planning process, few executives feel that they have adequate bench strength. As a result, according to a 2009 study, only a little more than 60...

Filed under: news

 
 
 

22 weeks ago

Succession Planning Is Every Leader's Job

Apr 23 2014, 4:59pm CDT | by

Though most companies conduct some sort of succession planning process, few executives feel that they have adequate bench strength. As a result, according to a 2009 study, only a little more than 60% of first level managerial positions and 52% of senior positions are hired from within.

Obviously this is just one study and numbers may have improved in the past few years, but even if they are off by 10%, the results are still disturbing, for two reasons:

First, it’s more expensive to hire externally, particularly at senior levels. Companies need to run advertisements, pay recruiters, and ask internal people to spend company time sorting through resumes and conducting interviews. There is also evidence from a Wharton study that external hires are generally paid more than comparable internal people. After all, most people won’t risk switching companies unless there is a financial incentive. However, the most significant expense is from lost or diminished productivity. Onboarding to a new company and culture takes time, which means that externally hired managers may not add full value for months, or even years — another finding from the Wharton research.

The second problem is that it puts the company at risk. Without ready-to-go replacements, jobs can remain open for long periods of time, which can delay projects or reduce the effectiveness of day-to-day operations. What’s even worse is that focusing on external hires sends a signal to internal people that they are not “good enough” to be promoted, or that their opportunities are limited. And without a sense of future possibilities, morale suffers and commitment wanes.

Simply going through the motions of succession planning won’t create bench strength by itself — nor will it convince managers that they will have future opportunities. In fact, the best that a good process can do is to analytically highlight the gaps where successors are needed. In one company, for example, the head of talent created a wonderful “book” which mapped out all of the key positions, strengths and weaknesses of incumbents, and successors who could step into these jobs either immediately, in one year, or three years. The only problem, as the Board Committee pointed out, was that there were virtually no immediate replacements for any of the top executives.

To make succession-planning a success, there are two inter-connected ingredients that need to be added to the mix. The first is a genuine commitment, at every level of management, that identifying and developing bench strength is a critical leadership responsibility — and that managers need to be held accountable for making sure they have successors in place. This means that while the HR function can provide support and guidance, and coordinate the planning process, it is managers who have to make it happen.

The second ingredient is an active development process to prepare people for next-level jobs. This too needs to be part of each manager’s responsibility — to help subordinates identify developmental needs and career aspirations, and consciously build learning objectives into their work.

It’s easy for managers to point fingers at the HR function or at senior executives for a lack of bench strength. Creating successors, however, is every manager’s job. In fact, if you really want to move on or move up, you need to make sure that you have someone in place who can take over when you are ready to go.

Editor’s Note:  version of this blog was cross-posted on HBR.org.

 
Update
2

4 weeks ago

Khazanah throws MAS RM6b lifeline

Aug 29 2014 5:01pm CDT | Source: Business Times Singapore

August 30, 2014 1:15 AMKHAZANAH Nasional will inject RM6 billion (SS$2.4 billion) over three years to resuscitate loss-making Malaysia Airlines (MAS) under a recovery plan that includes even an Act of Parliament. Other key moves are migrating its operations, assets and liabilities to a new company (NewCo) and slashing the workfo ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

4 weeks ago

MAS posts loss of RM307m for Q2

Aug 28 2014 5:00pm CDT | Source: Business Times Singapore

August 29, 2014 1:13 AMMALAYSIA Airlines (MAS) registered a loss of RM307 million (S$122 million) for the second quarter to end-June, but warned of worse to come in the second half when the "full financial impact of the dou ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Play after school makes the minds of kids sharper
New York, Sep 29 (IANS) If your child cannot wait to play after school, better not to restrict him, a study suggests.
 
 
OPEC daily basket price closes lower
Vienna, Sep 29 (IANS/WAM) The basket of 12 crude oils of the Organization of Petroleum Exporting Countries (OPEC) closed at $94.13 a barrel Friday, compared to $94.25 a barrel last Thursday, the OPEC Secretariat said.
 
 
Scorpion venom to fight brain cancer
Washington, Sep 29 (IANS) Scientists have received approval from the US Food and Drug Administration (FDA) to use "Tumour Paint", a product derived from scorpion venom for study in human trials in the US, in an effort to treat people suffering from brain cancer.
 
 
Modi to meet CEOs of top US firms, meet Obama for quiet dinner
New York/Washington, Sep 29 (IANS) Indian Prime Minister Narendra Modi has an event packed day Monday, including high-profile meetings with the CEOs of top US companies, before he departs for Washington where he will meet US President Barack Obama in the evening for a quiet dinner at the White House.
 
 
 

Latest from the Network

14 percent Britons have partners they have never met!
London, Sep 29 (IANS) In an indication of how much the virtual world has become part of our real lives, a survey has found that one in seven people in Britain has relationship with people he/she has only interacted...
Read more on Celebrity Balla
 
Asiad: Bajrang wins silver in wrestling
Incheon, Sep 29 (IANS) Indian wrestler Bajrang won the silver in the men's freestyle 61kg after losing the final 1-3 to Iranian Masoud Esmaeilpoorjouybari in the 17th Asian Games at the Dowon Gymnasium here Monday.
Read more on Sport Balla
 
Hong Kong cancels National Day fireworks display
Hong Kong, Sep 29 (IANS) The Hong Kong government Monday announced cancellation of National Day fireworks Oct 1. Protests have been taking place in various areas in Hong Kong, occupying some of the main roads, Xinhua...
Read more on Politics Balla
 
Want high-speed selfies? Try Instagram app
New York, Sep 29 (IANS) If you have not tried Instagram's new app for a high-speed selfie to woo your girlfriend, you are definitely missing out on some great action here. Instagram had come up with a time-lapse app...
Read more on Celebrity Balla
 
Now keep tab on kids' use of smartphones with new app
New York, Sep 29 (IANS) Does excessive smartphone use by your kid keep you worried? Now a new app allows parents to keep track of everything that their children do with their phones. Called TeenSafe, the web-based...
Read more on Celebrity Balla
 
Insecure people share more on relationship on Facebook
New York, Sep 29 (IANS) If you find your partner posting nostalgic photos from an old vacation or a family album, chances are that he may be insecure about his relationship status. According to a study, people who...
Read more on Celebrity Balla
 
Thriller to get 3D release
Michael Jackson's iconic 'Thriller' video will be released in 3D next year. The 14-minute 1983 classic short film will be overhauled by original director John Landis after he resolved a dispute with the late star's...
Read more on Celebrity Balla
 
George Clooney gave photo to guests
George Clooney and Amal Alamuddin gifted their wedding guests framed pictures of themselves. The couple - who married in Venice, Italy, on Saturday (09.27.14) have enjoyed a weekend of celebrations with around 100 of...
Read more on Celebrity Balla
 
Cate Blanchett receives doctorate
Cate Blanchett made a passionate speech as she accepted an honorary doctorate last week. The 'Blue Jasmine' actress was honored by Macquarie University in Sydney, Australia, for her extraordinary contribution in the...
Read more on Celebrity Balla
 
89 Bangladesh opposition members chargesheeted
Dhaka, Sep 29 (IANS) Bangladesh police Monday pressed charges against 89 members from former prime minister Khaleda Zia's Bangladesh Nationalist Party (BNP) in two cases related to the killing of a police constable...
Read more on Politics Balla