Ready, Willing, but not Able: Succession Planning in Ireland & the U.K.

Posted on July 21, 2008 by Erik Berggren

Companies embrace the idea of Succession Planning and Talent Management with great enthusiasm, but rarely put the mechanisms and tools in place to effectively follow through on their initiatives. SuccessFactors Research recently conducted a survey of Succession and Talent Management capabilities across the U.K. and Ireland, and found that this is indeed the case. Companies have initiatives in place, but do not back them up with effective processes and support.

For example, 76% of all companies in the survey were found to have some kind of succession plan in place, yet 40% of companies lacked any process or capability to identify future talent. You simply cannot identify successors effectively, if you do not have a regular process in place to identify talent within your company. Talent reviews should be the starting point, not the end point of the talent management process. Managers should have plenty of tools to help identify talent. 360 reviews, performance reviews, and competency assessments can all be used to make reasonable assumptions about the potential of an individual.

Losing your best talent can be disastrous during these tough economic times – making Succession Planning a top priority for organisations wanting to build growth and be successful. Organisations routinely encounter turnover across a variety of key positions which often results in significant disruptions if no replacement is readily available. You need to know what you have, at all levels in the organisation, before you can start to think about successors.

SuccessFactors is presenting a webinar focused on effective succession planning in the U.K. and EMEA, Effective Succession Planning: It’s not just for your CEO, on Tuesday, July 22nd, register here. You can learn more about the tools available to managers, and bring your own questions to our team. You can also read more about the state of Succession planning and talent management in the U.K. and Ireland in the related SuccessFactors Research Data Brief.

Do you shop at TalentMart?

Posted on October 26, 2006 by Max Goldman

Silo A good little tidbit from McKinsey on creating talent marketplaces that allow employees to find the best opportunities for them within their existing companies.

I’ve seen huge reductions in recruiting costs and higher employee engagement come from better succession planning -which lets companies have more visibility into their own talent pools. Imagine if we let employees help us out with that by searching out their own opportunities.

According to McKinsey, what prevents such a thing from taking place is the traditional hierarchical mind sets that “treat talent as corporate property and HR departments that chart career paths solely within organizational silos.”

There’s an interesting chart if you click the link.

Nuts and Bolts of Succession

Posted on May 12, 2006 by Max Goldman

I was directed to this very good article from WPS magazine called Succession Planning: The Nuts and Bolts of the Process which is sort of a primer on succession planning. A couple of its most enlightening observations are that 1. people often make the mistake of biting off more than they can chew with Succession – meaning that they try to collect too much data on too many people and 2. the best place to start a succession planning process is during the performance management process.

The author also points out an important decision: the one on which group will own the succession process. To me, the obvious place is HR, because succession fits so snugly with other responsibilities, but alternatives are a corporate strategy group or even a wholly separate succession group. A quote:

Once an organization has established all of the skills and competencies for every key leadership role and formulated a plan that works to take them from the current state of succession planning to the desired future state, the company must decide which department should own the process. “There’s not one cookie cutter answer in the sense that some organizations may have a corporate strategy group,” Kondo explained.

Leadership development is not (only) HR’s job

Posted on March 3, 2006 by Max Goldman

Or so says this HBS article (via Be Excellent).

Instead, they argue it’s the job of every operating manager and senior management up to and including the board should play a part:

In this worldview, it is part of the line manager’s job to recognize his subordinates’ developmental needs, to help them cultivate new skills, and to provide them opportunities for professional development and personal growth. Managers must do this even if it means nudging their rising stars into new functional areas or business units. They must mentor emerging leaders, from their own and other departments, passing on important knowledge and providing helpful evaluations and feedback. The operating managers’ own evaluations, development plans, and promotions, in turn, depend on how successfully they nurture their subordinates.

Further, boards can play a vital role in shepherding up-and-comers. Because they are detached from day to day operations, they can more clearly see the company’s leadership needs and bench strength.

This feels about right to me, but if it’s the case, what then is the role of HR? To me, it’s twofold: guidance and enablement.

Guidance in that HR experts will always be needed to help assess an individual’s ability and potential inside the organization. If the board adds value because they are outside the company, HR can add value by being the insider. As far as enablement, by providing and owning strategic platforms like performance management, HR can ensure they are the fundamental enabler of leadership development and succession planning.

Thoughts?

Divining vendor intentions

Posted on February 9, 2006 by Max Goldman

In business, but especially in the technology world, you can sometimes figure out what a company is planning by looking through their job descriptions. As an example, here’s an old post from one of my favorite gadget blogs, engadget, about Apple potentially making Ipods wireless – based on a job description they found on the company’s website. (The company later worked with Motorola to put Itunes on a cell phone)

The point is, you can sometimes divine a company’s intentions by seeing who they’re looking to hire and what skills they want those people to have.

I was directed to this job posting for a consultant at a company we are sometimes compared against. It includes skills such as:

BS in Computer Science with related experience
Significant Web Application Development experience (SQL Server, Oracle and/or DB2, HTML, Java script, Server-side scripting ASP JSP)]
Interaction with client IT directors and managers

Now, here are some bullets from a requisition for a consulting position at SuccessFactors:

Several years of experience in software integrations within or for a Human Resource Department.
Experience in HR practices, as well as PeopleSoft, Lawson, Oracle or other HR software preferred
Extensive HR background in Organizational Development, Leadership Development, Succession Planning, 360 Review, Core Competencies, etc.
Experience with managing the Quality Assurance processes for software implementations
Excellent oral and written communication skills
Technical understanding of software operating systems and ability to work comfortably with HRIS engineers.

The difference should be plain. SuccessFactors consultants are hired because they know HR – and are focused on solving HR business problems. Others are hiring software focused consultants because they are focused on delivering a piece of software.

Who would you rather have on your side?

For further reference, you might want to check out this piece at ZDNet about the real meaning of on-demand versus traditional software.

Preparing for Brain Drain

Posted on February 3, 2006 by Max Goldman

Are you prepared for the boomer brain drain? The oldest baby boomers are now only a few years away from retirement. What happens to the knowledge they’ve accumulated over the years when they leave? CIO magazine has a new article on the topic with participation from Liviu Dedes from Pepboys (a customer) on the topic of succession planning.

This is the kind of cross-industry issue that’s going to make bigger and bigger headlines the closer we get to retirement day. I’ve even heard it described as the Y2K of the HR world, but this time, there’s real probability of impact.

From the article:

Some companies turn to software to help predict future departures and determine crucial knowledge. Succession planning or talent management software can give organizations a good picture of who is working for them, how they are performing and how long they’ll be around. With retirement on the horizon and new management positions to fill last year, automotive chain Pep Boys started using succession planning software from SuccessFactors to give it a clear picture of all employees at the company’s 584 retail and service centres. “The risk of knowledge loss will always be there because there will always be unexpected departures,” says Liviu Dedes, Pep Boys’ director of training and organizational development. “But if you have a solid process to map out who is in your leadership pipeline, you’ll be better prepared to fill job openings, retain top-performing employees and prepare for retirement.”

Succession planning the new recruiting?

Posted on January 3, 2006 by Max Goldman

Here’s a little ditty at CLO magazine about the shift from recruiting to succession planning. As the talent pool decreases and boomers retire, companies are finding they simply don’t have enough good people to fill senior roles. According to the Right Management Consultants survey mentioned in the article, the number of companies in this situation is around 80% and "more companies prefer to build their own future leaders from the ground up…they are assessing their high-potential employees to identify which ones have the qualities they desire in senior-level managers, and then providing them with the necessary training, coaching, and managerial experiences to fully grow them into upper management. Therefore, companies must have a good succession management system which tracks the executive qualities, skills, and abilities that have been the most instrumental in their managers’ and organization’s successes."

We’ve got a number of stories here about customers leveraging our product to reduce recruiting expenses through better succession planning and this survey seems to support the idea.

Succession planning beef, anyone?

Posted on December 14, 2005 by Max Goldman

Sometimes all the high-level talk about performance management can leave you – how should I put this? – wanting more. Today I sat through a 45 minute webinar that left me thinking – "alright, I know you CAN do it, and it SHOULD work – but can you show me HOW TO do it, and that it DOES work?" I mean, where’s the beef? Show me the money! Is any of this actually real?

Well, in that vein I came across some data today showing that one of our customers with about 4,000 employees is saving half a million dollars per year on recruiting costs (because they are able to identify and promote more people from within), and has identified 40% more successors than before implementing the technology. I’m not bringing this up to toot our SuccessFactors horn (alright, maybe just a little) but instead, to show you some beef.

It’s easy to get caught up in the jargon and sales pitches when you’re talking about enterprise software. Don’t forget to ask about the beef.

The Next Y2K – Talent Management?

Posted on November 15, 2005 by Max Goldman

Got a tip on this interview with a Deloitte HR consultant named Andy Peck on Talent Management / Succession Planning.

His Take:

The biggest long-term issue is the lack of talent-management strategies and the relationship with changing demographics. By 2008 many baby boomers will be retiring, which will put enormous pressure on the workforce. One day companies will wake up and ask, “Where are the people?” It could be cataclysmic. Besides the lack of personnel, we are not planning how to fund pensions or how to transfer the knowledge of older workers onto younger ones.

You can make an analogy with Y2K, which also had a known deadline. People waited until the eleventh hour before making a plan to keep the lights on. The level of awareness about this problem is modest at best.

Here’s the whole interview.
Thanks to Dana Flanders for the pointer.

Poor Succession Planning Hurts

Posted on October 27, 2005 by Max Goldman

This article at Management Issues brings home the fact that poor succession planning can really hurt a company. According to the article, when a top executive leaves a public company, stock prices tend to fall. But when the company has no succession plan in place, they fare much worse in terms of stock price than those companies that do.