SHRM conducted a study a few years back and they found that nearly 1 in 4 companies do no succession planning whatsoever, and that just 8% maintain comprehensive succession plans.
The Corporate Leadership Council (CLC) conducted a survey in which 72% of their respondents said that in the next 3 to 5 years they’ll see an increasing number of leadership vacancies. Meanwhile, 76% of those same companies said they’re “less than confident” in their ability to staff those positions.
Do you see the disconnect here?
Ultimately, the reason I think we need to be concerned is that we need to be able to anticipate demographic changes, some of which we’re already seeing in the workplace, including a scarcity of true talent — people who have the skills and abilities that match the needs of our organizations.
Couple that with the fact that we’re in a knowledge-based economy and many companies have yet to focus on knowledge retention as a key driver of their businesses. That means we have a big problem!
There are 3 key strategies we can look at from a succession planning standpoint to help you not just survive but thrive in this business landscape.
1. Grow your own. You can create future leaders by developing in-house folks versus those from outside. Because they already understand your business, you can leverage that understanding much more quickly to get positive results. This will give you a much shorter learning curve.
With one caveat: if you’ve got the culture you want, growing your own makes huge sense. But if you don’t have the culture you want, think hard about whether the change should come from within. You may need to go outside to avoid the “we’ve always done it this way” syndrome.
If you don’t have the culture you want, succession planning won’t be your only issue. Click here to discover how to build the good, strong culture you want for your business.
2. Sell senior management on investment in your people. Most companies say their people are their most important asset…but the real proof is whether they put any investment behind that statement.
Succession planning needs to be an investment in leadership development. You must be able to quantify the time and money you’ll spend on developing your people and develop a real ROI for that. This goes along with growing your own because, if you grow your own, it should be much less expensive than hiring from the outside.
There is a school of thought out there that if you invest in your people, you’re just training them for some other company to come snatch them from you.
I’ve had business owners tell me that people will just leave if you invest in them.
My response is always Richard Branson’s quote: “Train your people well enough that they can leave, but treat them well enough that they’ll stay.”
It’s simple, but true. When a business owner tells me, they don’t believe in developing their people because they’ll “just leave,” they have a very shortsighted view of how to grow their business, and that they need to rely on other people to help them do that.
3. Elevate learning as a key business driver. What does the process of creating business results from the learning and development we’re putting into our people look like? Well, if we’re going to invest in our people in formal learning environments, there should be some ROI.
I remember back when I was in-house HR at a big company and team members went away to a conference. When they got back, we had a meeting where they’d tell us about the great sessions they went to and all the interesting things they learned.
When I asked, “How do we implement this?” I got blank stares.
If these are great ideas and you think they’re worthwhile, then we need to implement them! You’re not just going to these conferences to have a good time, but to bring back ideas to help us build our business.
That really espouses the idea of elevating learning as a key business driver. Whether it’s a tuition reimbursement program or money for seminars and conferences, the expectation needs to be that learning is supporting the business and that team members will use that knowledge to grow and improve it.
We already know that millennials love lifelong learning more so than many other generations. They love the idea of never being done learning and pulling knowledge in.
If we can harness that and celebrate the contributions we get from folks being developed, we’ll go a long way to not only retain the best and the brightest, but to start to attract better and brighter candidates to the organization.
With all that being said, I don’t believe that leadership development and training are the same thing. I think they’re separate, and I believe that from a succession planning standpoint the focus needs to be on leadership development.
Training is typically a one-off educational event: we went today and sat through a specific training for an hour and a half. Maybe you learn something, sure, but then you get hit with the reality of corporate life.
I remember what the first manager I ever worked with said when I went away for the three weeks of training required by the company. I told him how excited I was and how much I had learned, and he said, “Great, forget all that. You’re back in the real world.”
That archaic view is still very much alive out there with a lot of folks. If we can’t relate training back to the real world we live in, then it is truly a waste of time.
Leadership development, on the other hand, is taking things one step further. You’re teaching your high-potential people how to master general business competencies.
When you look at what it takes to be successful in business today, you realize that you cannot have silos.
A team member can’t just be a great HR person or a great salesperson or a great accountant. Each person needs to know how his or her expertise impacts and is impacted upon by the other business segments.
When we talk about learning and development, we’re talking about recognizing the fact that today’s businesses don’t operate in departmental silos.
I like the idea of pairing up classroom training with real-life exposure to a variety of jobs within the organization. I had a client who did this very well, calling it “action learning.” Their company identified a group of high-potential employees and pulled them together to study and make recommendations on a pressing business issue.
These weren’t simple projects. They were high-level issues that senior management had been struggling with. They gave the group time to work on the project (in addition to their regular work responsibilities) and they pulled together great ideas senior management had never even thought of.
This comes back to the simple fact that you can have a culture of learning and training, but if you don’t put it to work on something like this for a tangible business result, you’re not getting an ROI on your training dollars.
The cool thing about this “action learning” environment is that you start to see who from the cream of the crop will naturally emerge as leaders.
In today’s mostly lean and mean organizations, we don’t necessarily have the opportunity for job rotations, so I believe the best way to get exposure to other business facets is this action learning type of environment. The business problem may have nothing to do with their area of expertise, but they can help solve it.
One other big concern with succession planning is work-life issues. The younger workforce is very in tune with maintaining balance with their personal time. If your organization has a culture of working sixty hours a week and adding even more projects for high potentials, that won’t fly. Organizations need to find ways to resolve the work-life issues of their high potential employees with their work responsibilities, so they will want to stay.
Ultimately, as you build your succession plan you must remember that individuals’ work life concerns are going to change as they age.
A younger, unmarried high potential may be willing to work longer hours, travel more for the company, and take on more additional projects. As that high potential starts to settle down, maybe have a family, he or she may want to pull back on those things. Likewise, a middle-aged high potential may be caring for an aging parent.
If you believe in Richard Branson’s philosophy, work-life fit is a huge piece in that. How can you manage the company’s expectations of your employees with employee expectations of how they will be able to handle their personal life yet still be successful, productive, and growing their career?
Next month, we’ll look at the top 10 ideas for setting up your succession plan and 7 signs that show that what you’re currently doing isn’t working. Sign up here to make sure you’re the first to read it!