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Succession management hinges on planning, software

Deloitte VP Katherine Jones says too many organizations struggle with succession management, but software can help in important ways.

Katherine Jones is vice president of HCM technology research at Bersin by Deloitte. She is a lead author of a new Deloitte study...

called The Guide to Succession Management Technology in 2015: Managing Succession with Software. In a recent interview, Jones discussed succession management with SearchFinancialApplications.

Deloitte's Global Human Capital Trends report found that only 10% of survey respondents believe they have an excellent succession program, and 51% say their programs are weak or they have none at all. What is the reason for those findings?

Katherine Jones: Unfortunately, those findings reflect the state of the art in many organizations. People have not just taken that next step. They may have learning programs, they may have high-potential programs or executive development programs, but they don't put them all together. People don't like to ask the question, 'What if something happens to our executive team?' HR people don't like to talk about that -- it might sound scary. Also, the software supporting succession management is really in its infancy with its deployment. Most of the people with software have purchased it in the last five years.

What's the best way to create a formal succession management program?

Katherine JonesKatherine Jones

Jones: There are a lot of steps to it.

First, you need to figure out what positions are considered critical in your organization. In one organization, the chief data scientist is a critical position. In another, it might be an engineer. You need to identify the people around whom a company pivots one way or another. And then you need to ask: What is the talent you have today? Where are they and what do they do?

People need a much better understanding of what motivates different employees. If we never ask them what they want to be, we are going to be shocked and amazed when they go somewhere else and do something totally different.

When you identify high-potential people, accelerate their growth path so they are not stalled. That's a strategy that works very well.

How can software help in succession planning?

Managers tend to assume loyalty. They don't assume people are going to leave.
Katherine Jonesvice president of HCM technology research, Bersin by Deloitte

Jones: There are some very specific things that succession-management software can do that [are] not done anywhere else. For example, in the engineering group, a leader may have identified someone as a rock star. In another part of the organization, a leader may know the same person has a super finance background and has tagged the person as high potential. Leaders may be looking at grooming the same person for two very different but possibly strategic and important jobs. People tend to look at their organizations as little silos. Software can see talent across tiers.

Software can also look at the risk of a person leaving and what will happen if that person leaves. Is this person pivotal to the organization? Software can also display who is next in line behind the person and whether the organization has someone else who can do the job, and wants to do the job, if the person leaves. Software can also display the delta between the person identified and the job as it stands today. Software can help with readiness. It could identify a person who, maybe with a little training, could fill that position.

Managers tend to assume loyalty. They don't assume people are going to leave. They are blindsided when suddenly an employee says, 'I just got a super offer from a competitor down the street.' The manager should have known. Software might have indicated that the person had gone without a promotion for four years and was likely to leave.

In big, disparate organizations, where you have talent all over the world and you have people with various levels of managerial abilities and experiences, software is a good way of keeping track of all of that.

And if the opportunity or necessity of replacing somebody arises, leaders have more data at their fingertips to make good decisions.

What are some key points to consider when evaluating succession programs, processes and technology?

Jones: There are some standalone pieces of succession software, but for the most part, succession management is part of an integrated talent product. But the majority of them do the things that people need done. It is almost commoditized. In our study, we looked at different traits across 30 different solutions. They do most of the same things most of the time.

Look back at how people used to do succession management. HR people would create notebooks. They never had enough information. They would meet once a year and discuss things like, 'What if someone leaves? What do we do about succession in our executive staff? What if our engineering team bolts for a startup somewhere?' It was very inefficient and generally ineffective.

Part of it is the process: Remember that you have a plan and then follow it.

What are some important components to ensure an effective process for a succession plan?

Jones: The succession management process must be integrated with strategic workforce planning. For example, an organization might be considering building a plant in Romania in 10 years where labor is cheap and talented but the raw materials aren't there. Would it be cheaper to move raw materials to Romania for that plant or try to hire people at a higher cost and move them and build a new factory closer to raw materials? All of those things need to be looked at. That takes a lot of skill.

Performance management is also key to succession management. It gives you a way of looking at high performers who are high potential. It helps you keep track of people who are performing well but maybe are not high potential and people who are high potential but are not performing well.

The Global Human Capital Trends report found that leadership is one of the most pressing talent challenges faced by big organizations. In the survey, 86% of respondents cited leadership as a top issue and 50% rated leadership shortfalls as very important, but only 6% believe their leadership pipeline is very ready. What happened that the leadership pipeline was not in place?

Jones: Maybe a little bit from carelessness. But part of it is that we had a recession where suddenly people were not attending to succession. They were just trying to keep their companies alive. They took their eye off the leadership ball.

Many organizations treat succession management in a sporadic manner, limiting development to a select few. How did this issue develop?

Jones: One of the biggest problems is that company boards think they should hold leadership responsible for developing successors, but no one tells leaders how to do that. No one reminds leaders that they need to do that. It should be every leader's responsibility to figure out, 'If I go tomorrow, who would replace me?' Or, 'If someone on my team leaves, what would I do next?' There is a talent war. It takes a long time to hire for a very critical position.

Is there any one thing organizations can do to best succeed at succession management?

Jones: The first thing is to plan. It should be an ongoing task. It should be part of everybody's job, not just one person in HR, to ask the question, 'What do we do if?' Leaders and managers need to look across their group and at least occasionally consider, 'What would I do if that person left? And what could I do to prevent that if I needed that person?' It is all tied together with engagement, performance, learning and career management.

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Does your organization have succession management in place?
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At this point in time, our company does not have succession management as part of their process. We do reviews and performance evaluation, but focusing on succession looks to be very low on the radar.
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Thanks for the comment, Michael. Judging by the interview with Katherine Jones of Deloitte, your company is probably in the majority in not focusing on succession management. It does not seem to be a formal process at many companies. It seems to me that organizations should have a process that can allow employees to say they would like to advance to a certain position if that position opens up and that managers should have lists of employees they would like to promote to certain posts if those posts become open. Succession management software could allow for these options to be possible.
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We have had succession planning in place for just over 4 years now. It has greatly assisted in identifying those individuals with both the potential and the desire to advance and providing them with the growth opportunities that may otherwise have been missed. I think where we fall short is in actively maintaining and updating our successions plans once the initial assessment has been performed.
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That is interesting, mcorum. Yes, I can see how you need to keep those plans updated. However, I'm sure that people in charge are not exactly excited about maintaining and updating the plans after the first assessment is completed. I guess the initiative might need to come from the people who want to be considered for succession movement.
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We do not have anything like that, no. I believe it's a common belief at my organization that key positions can simply be recruited from outside. In recent years there have been 4 CEO's, 3 CIO's, 3 CFO's, 1 Chief Data Scientist (we previously had none), various software development managers and project managers, all brought in externally. 
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