It seems that even companies that have succession planning systems in place often struggle when it comes time to fill key management positions. This article focuses on the most common reason for this, and looks at the three simple components of a successful succession planning process.

At a recent dinner I attended, conversation around the table turned to "What do you do for a living?" When I'd taken my turn, a woman sitting nearby described a problem recently recognized by her employer. She worked for a small architectural firm. The founders and senior partners were close to retirement and had no one in mind to take the firm over. The employees were concerned because they had recently been through a serious recession and needed leadership to move them into a successful future. What should they do, she asked. The answer of course was that it was really too late to do very much. Years ago, the senior partners should have realized that they would retire one day and start to plan for that day.

The situation just described isn't rare. On many occasions I've been asked to assess potential promotion candidates just months before a key manager retires. Interestingly, in many of these companies they tell me that they have a succession planning system and that there was a successor named for the position. However, when the time came, senior managers decided he or she didn't fit the bill, and they must start a speedy and expensive search outside the organization.

There are many reasons why these situations may occur, but one I've noticed in many organizations is the way management perceived the process. Like many human resource programs, succession planning sometimes suffers from the "checklist syndrome." This occurs when management see it as one more thing on their to-do list, and when they see an administrative process called "succession planning" in place, they can check it off the list and move on to the next item. Sometimes it isn't even a system in place, it's simply a succession data base with names in the boxes. Once a year managers update the data, and then put it away for another year. Is it any wonder that, with succession planning of this ilk, executive search firms do so well. Every search assignment is a failure by the client to plan succession effectively.

Of course, your human resources should be managed as your finances and capital assets are managed, and when done effectively, succession planning can take up a minimal amount of management time and add substantial value to your organization. So forget about the administrative aspects although there will be some, and forget about the data base. For now just think about the following three action steps that will make your succession planning successful

• Identify the specific management competencies most crucial to success in the target position.
• Beware of cloning. Managers asked to identify potential successors are likely to choose those like themselves. Their choices may or may not be appropriate.
• Identify with a future orientation. Remember the succession candidate won't be managing today's organization, they will be managing tomorrow's.

2. Assessment of the strengths and development needs of each succession candidate is the first key step in helping them prepare for possible promotion. Remember to assess them against the competencies, and ensure that the assessment is targeted toward the next level position, not the position the candidate currently fills. We all know the Peter Principal which describes individuals who do well at their current level but flounder one level higher. Think for example about the differences in multi-tasking when one moves from first level supervisor to mid-manager. It becomes an entirely different concept. Here are three commonly used methods of assessment and a comment on each:

• Past Performance is by far the best predictor of future performance. Competency related data should be gathered through behavioural interviews with the succession candidate and from those others who know the candidate best. Remember though that this will be a measure of performance in the current job and future performance must be extrapolated.
• Psychological Testing has always been a popular method of assessing development needs. Such testing focuses on the underlying aptitudes and traits and can be tied closely to the identified competencies. As any ethical psychologist will tell you, care must be taken with these results, and they should never be used as a primary source of information. This is because research that examines how accurately test results predict future behaviour shows a fairly weak predictive relationship .
• Management Simulations are seen by many to be an ideal source of development data. A number of simulations (e.g. team discussions, problem solving exercises, dealing with difficult employees), based on the target position, are used to assess performance on each of the competencies. Another great advantage of simulations is that we can measure competencies that aren't a part of the candidate's past experience. For example a non-supervisory employee who has never supervised can be assessed on supervisory/leadership competencies. Similarly a manager who has never been asked to develop strategy can be assessed on strategic thinking. Most important, research carried out over many years has indicated that the predictive validity of properly conducted simulations in an assessment centre setting are reasonably high when compared to psychological tests.

3. Development of candidates then becomes the final critical step. Some key points to remember:

• Much of the development will be based on the key competencies identified in step one and the assessment carried out in step two. However, there are often competencies specific to the individual or to the position that don't make the short list of general competencies. Don't allow these to fall through the cracks.
• Development and training aren't the same thing. Many managers, when confronted with a development need automatically start to look for a workshop to attend. Development comes in many forms, and the most effective usually has a major experiential component.
• Development must add value. This value is the enhanced performance of those who are developed as translated into organizational productivity. Many managers lose sight of this fact. People seldom change as a result of a workshop. It is the application of learning that leads to continued development, then ongoing feedback and coaching that makes the difference.

So whether you are currently thinking about a new succession planning process or examining the effectiveness of an existing one, it pays to build your thinking around these three steps. Oh, and you likely will need an administration process to run it and a data management system on which to store it. But these are peripheral to success.

For more information contact Bob Power