Leaders say it is important to look at succession planning from an EVP perspective.
In an engaging webinar sponsored by HFMTalentindex, talent management leaders shared their learnings on succession planning, while providing practical advice on how to get started and improve existing processes.
Nomaswazi Ngwane, human capital executive, mass and foundation cluster, at Old Mutual, former CHRO SA managing director and founder of Novo, Graham Fehrsen, HFMTalentindex’s senior psychologist, Caitlin Quibell, and group head of capital at Ooba, Linda Roos were the speakers.
What succession planning is about
Asked what succession planning is, Graham said for him it’s a long-term prospect: “It’s something that organisations put in place as a discipline and it combines both data-centric and human-centric approaches that create greater talent certainty on one hand, but also greater organisational agility on the other hand."
Caitlin said when they look at succession planning at HFMTalentIndex, they focus on three questions: “Where is our talent right now? Where do we want them to go in future? And how do we get them there? And basically bringing all those elements together into a semi-structured process that can then be implemented and repeated.”
Value of succession planning
Nomaswazi made reference to the past 18 months, and the number of changes and shifts businesses have had to make, whether it was in the form of losing employees, changing operating models, or people making different life decisions because of the pandemic.
“If you think about the sustainability of businesses, and the continuous quality running of organisations, it becomes critical that you have a plan around what position the organisation takes when it is in a time of need,” she said. “But it’s important that you also don’t think about it in terms of times of need, but also from an employee value proposition perspective.”
Nomaswazi highlighted that it is important to look at succession planning from an EVP perspective, as employees are evaluating whether they will go to Company A, or go to Company B, and are asking questions about their development plan and path at each. “It’s important that organisations respond to that because companies are competitive with each other. We’re competitive in the market and we compete globally,” said Nomaswazi.
Linda agreed with Nomaswazi and said people are expecting to have opportunities to grow and evolve and develop in an organisation. “From a company perspective, succession planning is a risk mitigation strategy in order to ensure that your business remains profitable and sustainable, that it maintains the kinds of relationships it needs,” she said.
“In our business there are two important areas for us that are driving our succession planning agenda and those are the relationships that our people hold that need to be maintained and nurtured and then the very scarce and critical niche skills that we have to retain in the business.”
Linda added that at Ooba they see succession planning as a term that they have borrowed from someone else, but which really has been a strength.
Risks of ineffective succession planning
Graham shared that in his experience working as an executive coach with leaders in transition, that when succession planning is well executed, leaders have a plan on how to take up their new roles and people understand how those roles will be integrated.
“And if it's not done well, the risk is that your organisation potentially loses direction. Often in that early stage, executives drown themselves in trying to take up the seat without a clear plan and I see a lot of burnt-out executors. So there are two parts. There’s organisational risk, and there’s individual risks. Succession planning isn’t just risk mitigation, but also an opportunity to do some future and forward looking.”
Succession planning processes
Nomaswazi spoke about the ratio process, which she says has worked for all three of the organisations she has worked for. She explained that the ratio process is about looking at succession planning immediately, for incidents or events that could happen in the next zero, quarter to six months, looking at talent and to develop a number of succession candidates for each key position.
“A good target ratio is 3:1: for every role that has been identified as critical, have three people who are in the process of becoming ready to step into the role. And how you get to that ratio is thinking about what happens if a candidate decides to leave tomorrow or in six months’ time and wants to take a different opportunity.
“It is important to think within that long-term period, what are the mitigating plans that you have for a specific role. This forces thoughts and deliberateness around planning for roles,” she said.
Succession planning in the new normal
Caitlin shared that HR or business leaders need to ask themselves how they run succession planning in a world where they maybe can’t follow the same processes they used to follow.
“A lot of organisations still use paper and pencil assessments; how do we modernise the practices that we use? How do we bring them online? How do we reach people that are in different geographical locations?
“The other perspective is if we’re going to continue working online, if this world is only going to become crazier, and things are going to change more and more rapidly, what sort of individuals do we see as being the talent of the future? And that’s about thinking about what the future skills are, things that people will need to do.”
Cailtlin concluded, “One way that we look at this is by focusing on learning agility. In other words, how effective are you at being open to change and adapting to change and coming up with new approaches to things?”