The World Athletics Championship has brought the subject of succession planning into sharp focus, with some big names bowing out and several up-and-coming competitors finishing higher than ranked or expected.
The resulting debate about the need to ensure a strong pipeline of talent coming through applies as much to business as it does to sport. A recent report from specialist lender Aldermore suggests that 61% of UK SMEs have no clear plan in place to ensure their business is not adversely affected if key staff leave. This is despite the fact that more than one in seven believe the biggest threat to their organisation is the departure of a senior executive.
SMEs are more vulnerable than most when it comes to people leaving. It only takes one key member of staff to depart, taking critical skills and important client relationships with them, to cause massive disruption.
The problem is that business continuity often isn’t top of the agenda in a fast growing business. As a Deloitte report points out, it’s all too easy for leaders to get caught up in the challenges of the present. They either assume that somehow succession will work itself out naturally – or consign it to the bottom of the to do list because it’s an overwhelming and complex task they don’t have time to tackle right now.
Having the right people, in the right place, at the right time is vital if companies are to remain competitive in fast-moving, volatile markets. So, what do SMEs need to do to ensure they are planning for a smooth transition to the next cadre of leaders?
1. Speak to people
Don’t assume you know what employees’ aspirations are. That high potential employee you have earmarked for promotion as soon as an opportunity arises may well be harbouring ambitions to leave and set up their own business. The person you have in mind for a critical role in Europe may not be willing to uproot their family and move elsewhere.
Use appraisals as an opportunity to understand what people’s ambitions are, but don’t restrict the conversation to just once a year. People’s situations and ambitions can change very rapidly, so use informal check-ins to make sure you are up-to-date with what your top talent actually wants. This will help you see how key employees might best fit into the company’s future, and could also help you identify star performers who may be flight risks.
2. Look ahead
Don’t fall into the trap of seeing succession planning as a box-filling exercise. The organisational chart you have today may look very different in a year’s time. Consider the strategic plan and think about the skills and competencies that will be important for the business going forward. Look at how the market you operate in is likely to change.
What trends will affect you? How quickly are they likely to come effect and what does that mean for the kind of people you need in the business? If the company has plans to grow very rapidly, you may need to combine internal succession planning with proactive attempts to build a pool of potential candidates from outside the business too.
3. Plan for development
Once you’re clear about the skills the business will need in the future – and who the key players might be – it’s important to have a concrete plan for training and development. Do your high potential people have the right skills for the roles you are envisaging? Will completely new skills that are not present in the business right now be necessary as the market or client needs shift?
Coaching and mentoring can be a great way to develop people in the right direction. Secondments or temporary assignments to a business critical project can also be highly effective in helping people develop their leadership and management capability.
4. Consider breadth and depth
Many companies make the mistake of restricting their succession planning to the top tier of management. But if the business is to mitigate risk and remain competitive, the talent pipeline needs to run from top to bottom. Sometimes, critical specialist skills, for example, are as important as leadership ability.
If these skills are held in the hands of only a few, the business is leaving itself highly vulnerable. Every department needs to be thinking about succession planning so that it doesn’t suddenly find itself with the rug pulled out from under its feet if a key person unexpectedly heads for pastures new.
5. Do it now
It’s easy to put succession planning onto the “too difficult” pile, but companies delay it at their peril. Succession needs to be a standing item on the senior management agenda. It’s not a one-off event, but a continuous process which should flow alongside the changing needs of the business. Technology can do much to help streamline the process and put the data managers need at their fingertips.
The talent and succession module that comes as part of Cezanne HR, for example, can make it simpler to track information on everything from performance and potential to readiness and development needs. It allows the business to plot alternative career moves and see their impact, and to set up a variety of talent pools – broad-based pools for high potentials for example, alongside specialist streams for areas like IT or marketing. The technology makes the job of linking the skills and aspirations of employees with business needs so much easier – and avoids the common problem of succession plans relying too heavily on a few of the same people.