By John Bentley and Lucille Force, RN MSN, MSA
Some might think the term “succession planning” wouldn’t be so difficult to incorporate in the corporate sector. After all, the word ‘success’ is front and center, but in reality the term is much more easily said than done.
Succession planning ensures the continued effective performance of an organization by establishing a process to develop and replace key staff members, over time. It should involve businesses investing time, ideas, and planning in order to entrust continuity of their leadership talents.
Great succession plans are linked to the organizations’ vision, mission, and goals; and those plans then identify the required leadership behaviors to achieve those goals. Effective and successful organizations do not passively wait for their future. They create it; by investing their time, planning and creative thoughts into assurance in the stability of their leadership talent.
Quint Studer, founder and CEO of Studer Group, and named by Modern Healthcare as one of the “Top 100 Most Powerful People in Healthcare, published this in 2007:
Yet in a 2004 study, the American College of Healthcare Executives (ACHE) reported that only 21% of 722 hospitals engaged in routine succession planning. Chances are high that the best candidate for a director level position is a current manager and that the best candidate for your next vice president is a director. Unfortunately, many organizations are focused on senior leaders, never considering the talent hiding even deeper in the organization.
As rooted in common sense as succession planning may be, getting it from theoretical status to practical application can be a challenge. Why? There are many reasons – from simple self-preservation – to awkward or inappropriate execution of a succession program.
Three Degrees of Succession
There are three types of succession planning: Simple replacement planning, developmental succession planning, and talent pool planning:
1) Simple replacement planning is a process that indicates possible internal replacements for critical positions.
2) Developmental succession planning is a process that identifies possible internal candidates to fill critical positions AND that provides for developing individuals to meet the challenge of future organizational change. Through encouragement, these leaders in the making are developed through continued technical proficiency and by grooming for possible advancement.
3) Talent pool planning involves identifying a group of possible internal replacements for key positions and then cultivating the development of groups of people to meet future organizational change challenges.
No matter the type of succession plans that are used, the ultimate goal is to plan a sequence of personnel moves and training to groom and prep candidates. Arming them with proper training for key positions is preemptive to prepare for a time they are called upon to meet the challenge of future organizational change.
Why plan for succession?
Many businesses and organizations already are (or soon will be) experiencing a leadership crises in the form of voids at or near the top. As large numbers of upper and middle management position employees – most of whom are baby boomers – retire, there will be a need to fill their shoes.
Approximately 80 % of middle and upper managers in the federal government are already eligible for retirement, and although the percentages for similar management position employees in state and local governments are unknown, they are assumed to be alarmingly high. On top of that, the United States will have 10 million more jobs than skilled workers to fill them by the end of this year. (It’s true!) Those numbers alone should adequately convey an urgent need for businesses to pursue succession planning.
Another reason for succession planning is the traditional approach many organizations employ regarding short and long-term capital improvements and operational programs planning. They do so without fully integrating the accompanying impacts on developmental needs of employees that are responsible for delivering services or goods. The result is those employees’ capabilities are not developed accordingly to match the skills needed do deliver those services and a gap occurs between what the organization requires and the employees’ ability to respond to those requirements.
According to William Rothwell, author of “Effective Succession Planning”, research suggests that 70 % of all U.S. companies do not have a working succession program of any kind.
Failure to anticipate and plan for veteran talent and leadership drain — or succession plan — is one of the best ways to prevent either gradual or sudden erosion of leadership and experience at key positions.
Lucille Force (RN, MSN, MHA) says; “If organizations don’t get on board with succession planning, many may implode.”
When succession planning fails
There are a surprisingly abundant number of reasons why succession planning either fails to get off the ground, fails in general, or makes things worse. Many organizations fail to plan because they are always in “crisis mode” and succession planning is barely an afterthought. Certain companies (many of them) simply overlook potential leadership drain and don’t react until it’s too late.
One significant barrier is a general lack of experience in succession planning at many companies. Most current leadership positions in organizations and businesses are held by baby boomers, which may look at succession planning as unwelcome competition for their jobs.
“I have personally witnessed this,” said Force.
Sometimes, it can be as simple as a failure to identify the best potential leadership candidates. Many organizations place too much emphasis on new blood as the answer for leadership losses. While new employees and fresh faces may indeed bring in new and different ideas, there are potential drawbacks. Among them, failure of the new faces to know and understand the rich history of their organization, a lack of awareness of the unique nature or composition of their clientele or customer base, and/or a naiveté when it comes to the current climate or internal political situation at their organization. These things take a long time to learn and understand, as well as either overcome or utilize.
Many times, businesses correctly select people to put in leadership positions who are technically sound, but never provide adequate training, coaching, or mentoring. Conversely, they have the training in place, but fail to select the best candidates.
A little-known problematic approach to succession planning involves implementation of a program promoting or focusing only on upward and not lateral movement. Another pitfall involves promoting people with certain personalities or behavioral styles, instead of looking for leaders who understand behavioral adaptability or how to connect with everyone. Do they make employees feel valued and inspire employees to give their best efforts?
Many don’t. So, what are the two biggest mistakes made involving succession planning? Not holding managers and leadership accountable for succession planning and not sharing data with employees.
How to succeed in succession planning
A great succession plan is linked to an organization’s vision, mission, and goals. It requires leadership behaviors to achieve those goals and realize those visions and missions. These behavioral styles and traits become part of a leadership development program and may be learned through various methods. Those include classroom, online, developmental, on-the-job-training, and coaching/mentoring. All of these things combined ensure that an organization has leaders who create a healthy overall organization in which employees can unleash their full creative power to achieve the overall mission.
Succession planning is not a new idea. In fact, it has had its success demonstrated more than once.
Former General Electric CEO Jack Welch was quoted as saying; “From now on, choosing my successor is the most important decision I’ll make. It occupies a considerable amount of thought almost every day.”
That’s no small statement coming from a man who increased GE’s value from $13 billion to $410 billion in his 19-year tenure as the company’s CEO.
It’s the role of every manager to help their promising subordinates develop their fullest potential by continually challenging them and increasing their leadership competencies.
Successful execution must include succession planning. You could say that the development of future leaders must reflect an organization’s objectives and goals. To that end, succession planning should involve:
- The support and backing of a company’s senior management.
- Identification of the skills needed by an organization over the next five to 15 years.
- An integrated human resources process involving development, training and performance review.
- Identification of key positions and their inclusion in the succession program.
- Analysis of the existing workforce and identification of which employees are eligible to retire within five years.
- Identification of qualified high end employees ready or almost ready to step into key positions.
- Select the specific competencies and skills needed for viable replacements.
- The existence of a solid communication system with managers.
- Establishment of a system for locking in on the best potential replacements for outgoing leaders, and evaluating those candidates’ backgrounds.
- Development of candidates’ skills through work experiences, job rotations, projects and special assignments.
- A system of monitoring candidates’ progress in addition to one that offers encouragement, feedback and rewards.
- Ownership of the succession program by the entire organization, not just its HR department.
Primary and peripheral benefits
Besides the obvious reward of preventing the erosion and loss of leadership, experience and talent; succession planning also fosters other benefits.
A potentially underrated dual benefit to successful succession planning is the establishment of a wider and better field of talent that will one day become the next generation of leaders of the company.
Employee turnover can be lowered due to having more satisfied and happy employees who want to work, and want to work longer at a certain organization.
Less time, effort, and resources are wasted in replacing retired or outgoing leadership talent, thereby saving money and improving the bottom line. This is also beneficial to healthcare, due to lower reimbursement costs and higher levels of quality and improved patient satisfaction.
Another plus not to be overlooked is the boost it levies above competitors who are failing to utilize succession planning. Much of success — as in business or other arenas — comes from staying ahead of your competition or peers.
Putting the ‘SUCCESS’ in succession planning is not something you should put off, as a senior leader at any company. Instead of being afraid of relinquishing control or telling too much, it should be seen as a way to grow and become even more powerful at the company. You are the leader and the one that subordinates turn to. Share the knowledge and see what a boost having succession planning can offer to your organization.
John Bentley, president and founder of Power 2 Transform has earned a reputation for getting to the heart of the matter by helping healthcare organizations develop a culture where employees operate at their full creative powers ensuring the highest levels of patient safety and satisfaction. You can contact John at www.power2transform.com or firstname.lastname@example.org
Lucille Force, RN, MSN, MSA is an Associate Chief Nursing Officer in Massachusetts. She has over thirty years of nursing experience and is certified in Nursing Administration by the American Association of Nurse’s Credential Center.