Business Succession Planning

One critical step is the attraction and retention of a committed workforce is to ensure that those outstanding current employees are not only identified, but they also have the necessary skills when being considered for promotion. If we do not retain our most talented personnel and provide the skills necessary to be highly successful, we will then have to recruit them from the open employment marketplace. The following might become of interest if or when that becomes necessary.

The United States Department of Labor is projecting some troubling forecasts as it relates to the ability to attract qualified workers starting in 2007. Some of the reasons for this projection include:

• An increased number of low skill jobs being moved offshore because of lower labor costs.
• An increase in jobs with fewer qualified people to hire
• A very low birth rate between 1975 – 1985
• Higher number of people retiring and not wanting to work full time
• Projected unemployment rate of only 3.0 (considered to be the hard core unemployed) by 2008
• Students continuing to graduate without the necessary job skills
• Future jobs will require more skills, especially technical and computer skills
• An increasing demand by new workers for better working conditions and recognition for their contributions for a job well done
• A substantial increase of minorities and women into the workforce including foreign-born workers, disabled, and those with felony records will be coming into the low and unskilled labor pool.

The bottom line is that you can’t hire people who do not exist, don’t apply, or people that either do not understand the job or are unwilling to work in adverse conditions.

There are some key steps in the development of a comprehensive business succession plan that can be adapted to all managerial staff members. The steps in this program include:

• Review of the current succession planning process and executive plans
• Develop a competency model for each level of management that includes both managerial and technical competencies plus the related characteristics, traits, and attributes essential to success
• Meet with each person to customize the output of the competency model for their individual position
• Incorporate critical responsibilities and qualification requirements into each plan and program
• Develop or modify the capability and importance assessments by competency for each person that will be part of the business succession planning process.
• Expand the assessment process to include all competencies
• Modify the vacancy scenarios for each position with customized intervention suggestions
• Develop and incorporate a probability of turnover section
• Meet with each person to finalize all changes for their individual positions

Some sample competencies for a Chief Executive Officer could fall into three separate but equally important areas.

• Managerial Competencies
  – Visionary Leadership
  – Establishing Strategic Direction
  – Marketing and Entrepreneurial Insight
  – Communication and Presentation Skills
  – Decision Making, Problem Solving, Analytical Thinking
  – Operational Management and Control
  – Staff Management and Development
  – Developing Partnerships and Teamwork
• Technical Competencies
  – Achieving and Maintaining Financial Viability
  – Innovation
  – Building Alliances
  – Developing Talent
  – Customer Focus
  – Business Acumen
• Characteristics, traits and attributes
  – Resilience
  – Social Confidence
  – Excellence in Forward Thinking
  – Assertiveness
  – Team Orientation
  – Adaptability
  – Detail Consciousness
  – Decisiveness
  – Emotionally Controlled
  – Achieving
  – Dependability

Once all of the competencies and characteristics have been determined and agreed upon by current holders of that position, it then becomes necessary to determine to what level a person who is highly successful in that position should attain before moving up. This assessment identification can be as simply as awareness, knowledge, skill or proven expertise barometers of success. This assessment is usually done by the immediate supervisor who also will determine where the individual’s capabilities are currently.

Some key differences between the succession plans for different levels within the organization would include:

• Managerial competencies vary for each hierarchal level
• Technical competencies are based upon the professional expertise required
• Characteristics are rated by essential – important – relevant and vary for each plan
• Skills sets vary for each plan

Some other pertinent inclusions that should be part of a comprehensive business success planning process are:

• Expansion of direct report turnover probability into three categories
  – Within next 12 months
  – From 12 to 36 months
  – From 36 months to in excess of five years
• Fully customized vacancy scenarios
• Incorporation of importance ratings
  – Awareness - Knowledge
  – Skill - Proven Expertise

An excellent business succession planning process would roll down through each managerial level within the organization and each direct supervisor would review the importance rating and assessment for each direct report, ensure that each direct report develops an Individual Development plan (IDP), or specifically what competencies they want to improve before the next review period, and incorporate those goals/objectives into there performance appraisal document. Finally, a yearly review should be conducted and updated as necessary.

If an organization is truly interested in attracting and retaining the best and brightest employees, while protecting the organization’s intellectually property and tribal knowledge, business succession planning is a must.