Succession Planning: Talent pools to deliver a competitive edge

The talent-pool approach to succession planning has emerged as a best practice that establishes a larger number of employees for promotion, who are more likely to stay loyal and whose skills are best aligned with the organization’s strategic plans.

Succession planning approaches that rely heavily on a traditional org-chart replacement methodology are narrow in scope and time consuming to maintain. Leading succession planning experts recognize that many organizations confuse replacement planning for true succession planning, where the focus is on developing people with the goal of building overall bench strength.

Despite the current downturn, many organizations are still faced with the pressures of an aging workforce, along with a shortage of skilled workers. This means succession planning strategies and tools must effectively enable them to nurture and develop a pool of employees to draw from, while aligning efforts with the organization’s strategic direction.

The succession situation
With baby boomer retirement waves looming, and the economic climate creating a real urgency to retain and develop the best and brightest, succession planning is still an imperative business issue in preparing for tomorrow. Well-known succession planning expert, William J. Rothwell, PhD, identifies the top five benefits of succession planning in his book Effective Succession Planning as:

•     Being able to provide increased opportunities for high-potential workers;
•     Identifying justifiable training, employee education and development opportunities/needs;
•     Increasing the talent pool of promotable employees;
•     Contributing to the organization's strategic plan; and
•     Helping individuals realize their career plans within the organization.

Historically, however, efforts to implement automated succession planning tools have failed to deliver.

Why have so many efforts failed? Much of it has to do with the fact that succession planning has often focused on too few successors for a few key positions – simply replacing people on an organizational chart. By their nature, succession plans focus on replacing someone in a designated role - they do not facilitate planning for, or developing, future workforce requirements. Success for these types of programs is also elusive because they are overwhelming and difficult to implement, time consuming to administer, out of date quickly and often force organizations to duplicate efforts to get the information they need.

Best Practice: the talent pool approach
A talent pool is a group of people being prepared for more challenging responsibilities. Individuals to be placed in talent pools may be selected by various means. One approach is to ask managers to assess and nominate people. Another is to apply objective assessment methods-such as, 360-degree, multi-rater assessments, and performance appraisal history to identify individuals who may be developed for future responsibility.

Traditional replacement planning encourages promotions in “silos” of specialization. In contrast, talent-pool-based succession planning encourages managers to consider talent in every part of the organization as a possible successor for positions that may come open. Talent pools may be identified underneath each “level” on the organization chart, but are not tied to specific positions at higher levels.

In many cases, talent pools are filled from the bottom up. High-potential candidates are placed in talent pools and then receive preparation, which may include training and education, for possible promotion. No promises should be made to these employees that they will receive promotions. Instead, the organization commits to help these individuals prepare themselves to qualify for greater responsibilities. It is ultimately up to individuals to perform well in their current roles while also preparing themselves to meet the new challenges within more senior positions. Successfully implemented, when a vacancy occurs, the organization will have a pool of internal candidates ready to meet the challenge.

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1. Understanding Workforce Potential and Areas of Retention Risk: this stage is complete after running an initial appraisal process. It is designed to help target high-potential employees and understand talent areas most at risk.
2. Developing Internal Talent Pools: prepare talent succession for all areas of an organization - not just leadership. This allows the organization to more easily align workforce requirements to meet the needs of corporate vision. Define competencies and development plans around skill groups (pools), conduct talent assessments and close gaps.
3. Easily Identify Successors: recruit from within a larger pool of developed employees, reduce succession risk – and retain talent

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Avoiding common pitfalls
Statistics show employees that are part of a managed talent pool are more likely to stay with their organization. So it is important to avoid a few myth-based pitfalls that can occur when performance management for talent pooling is not managed closely. William Rothwell outlines some common ones, which include:

• Success at one level will guarantee success at a higher level: An individual’s success at one level is no guarantee of success at higher levels of responsibility. The reason is simple: the competencies required for success at each level are different. Hence, it is important to separate thinking about how well someone does his or her current job and how well he or she might do a job at a higher level of responsibility.

• Bosses are always the best judges of who is appropriate for promotions: This is not always true. Bosses are self-interested players in the succession game. They have a stake in what happens to people. Indeed, some bosses do not want to see their best people promoted for fear of being unable to replace them. Some bosses grade people by their own standards-the result is that some individuals who are unlike the boss are not considered for promotion. While the support of a boss is useful in developing individuals, more objective assessments, such as multi-rater assessment are excellent in aiding the manager’s assessment.

• Everyone wants a promotion: This is also not always true today. In many downsized organizations, workers have seen what pressures their bosses have to deal with. Some say “leave me out of that.” It is unwise to assume that everyone wants a promotion-or even to assume that money or other incentives will convince everyone to seek out or accept promotion. It will not. Check first. Find out what people really want to do. For that reason, many organizations launch both a top-down succession planning program and a bottom-up career planning and training program to galvanize development efforts both among managers and among individual employees.

Conclusion
Implementing systematic succession planning requires long-term organizational change. It requires a greater commitment to a more strategic view of how to meet talent needs, than short-term, and sometimes panic-driven, efforts to fill vacancies as they occur. It can be established and operated using best practices that have been field-tested in many organizations, industries and economic sectors. If done correctly, organizations will benefit from the competitive edge in an increasingly tight knowledge economy.

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Sean Conrad is a senior product analyst with Halogen Software (www.halogensoftware.com). He is a frequent speaker and author on talent management strategies, trends and issues. He can be reached at [email protected].