By Jason Richmond, Chief Culture Officer and Founder at Ideal Outcomes
Historically, succession planning has been focused on key leadership roles. For example, when Jack Welch was the CEO of GE, the rule of thumb was three replacements for his role. In other words, there should be three people with the potential to replace him at any given time. This concept has been adapted and proven to be effective by a number of organizations. One that comes to mind is McDonalds, which survived the unexpected loss of two CEOs in a nine-month period.
The first was long-time CEO, Jim Cantalupo, who died suddenly from a massive heart attack. His successor, Charlie Bell, was diagnosed with colon cancer just seven months later. Jim Skinner, who was Charlie’s replacement was known to ask his managers regularly, “Give me the names of two people who could succeed you.”
Today, organizations are likely to have a more expanded perspective on succession planning. Typical is a succession strategy for executive roles, with the most common being one to two levels below the CEO. Many organizations, especially those with a strong talent management focus and strategy, drive succession planning more deeply into the organization, developing plans for all leadership roles, including front line leaders. Other perspectives for succession planning take a strategic workforce planning perspective and focus on pivotal and hard to fill roles.
There is no one correct approach. If you have no succession planning processes in place at all, you will want to work with your executives on a long-term plan based on critical business needs and priorities. You may decide to start with executives, and that is the most common initial step. But if you are in an industry with a number of hard to fill roles, this might be the right place to begin. If you are growing very rapidly, the positions that are critical to support successful growth might make more sense.
Good analytics also play into the decision. As part of your process, you and your executive team will need a clear understanding of reasons for employee turnover and the performance success of internally developed managers vs. externally hired talent. What data do you have that can help you prioritize where to start your succession planning process?
Finally, keep in mind that succession planning is the means to an end. Its purpose is not only to identify talent, but also to develop it. Many organizations do a robust job of identifying key talent, but do not follow through on the development side. Watch for our blog on talent development for tips and strategies to fine tune your succession planning process.
Looking to make the most of your organization's succession planning? We've got you covered in Oracle HCM Cloud Talent Management Cloud, where you'll find all the tools you need to ensure business stays on track and nothing falls behind.
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