Exploring and designing an appropriate succession planning model

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This research study focuses on exploring the most appropriate succession planning process and thereby designing an industry-specific model.

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International Journal of Management (IJM) Volume 9, Issue 6, November- December 2018, pp.54-60 , Article ID: IJM_09_06_005 Available online at http://www.iaeme.com/ijm/issues.asp?JType=IJM&VType=9&IType=6 Journal Impact Factor (2016): 8.1920 (Calculated by GISI) www.jifactor.com ISSN Print: 0976-6502 and ISSN Online: 0976-6510 © IAEME Publication EXPLORING AND DESIGNING AN APPROPRIATE SUCCESSION PLANNING MODEL Dr. Revathy Shivashankaran Assistant Professor School of Commerce and Management Studies, Dayananda Sagar University, Bengaluru, Karnataka, India. Dr. Anni Arnav Assistant Professor School of Commerce and Management Studies, Dayananda Sagar University, Bengaluru, Karnataka, India ABSTRACT "Building a deep leadership pipeline is a priority for any progressive and growth- driven organisation as it is a critical element towards building a lasting institution which outlives its founders." As rightly said by Rituparna Chakraborty, Co-founder and Executive Vice- President, TeamLease Services, Succession Planning is one of the major concerns of today’s business organizations. Succession planning is a talent management process that builds a pool of trained workforce who are ready to fill key roles when leaders and other key employees step down. Succession planning relies on a large pool of talented workforce ranging from entry-level to senior leadership who are being prepared for key roles. These employees have the right skills, energy and leadership qualities that will benefit the company across a spectrum of roles, departments and seniority levels. Organizations with succession planning programs in place foster a talent-oriented culture by recruiting skilled employees and top talent. Once recruited, businesses focus on developing these employees’ skills, expertise and knowledge so they are prepared to take on leadership roles in the event of organizational growth, talent loss or management turnover. This research study focuses on exploring the most appropriate succession planning process and thereby designing an industry-specific model. Keywords: Succession planning, talent management, organizational growth, leadership. http://www.iaeme.com/IJM/index.asp 54 editor@iaeme.com
Dr. Revathy Shivashankaran and Dr. Anni Arnav Cite this Article: Dr. Revathy Shivashankaran and Dr. Anni Arnav, Exploring and Designing an Appropriate Succession Planning Model, International Journal of Management, 09 (6), 2018, pp. 54-60 http://www.iaeme.com/IJM/issues.asp?JType=IJM&VType=09&IType=6 1. INTRODUCTION Succession planning and strengthening of the leadership channel are the top talent concerns for corporate executives globally, according to a study by Deloitte. Executives worldwide predict leadership shortages in the approaching years and are looking at various ways to accelerate leadership development within their organizations. The report, titled, 'Talent Edge 2020: Redrafting Talent Strategies for the Uneven Recovery' says, despite a new wave of uncertainty, many leading companies are reshaping their talent strategies. As a result, organizations across the globe are seeking new sources of growth and are tailoring talent plans to address differing regional needs to support effective talent strategies and business operations. Succession Planning is the process of identifying and tracking high-potential employees who will be able to fill top management positions when they become vacant. Succession planning is an ongoing process that identifies necessary competencies, then works to assess, develop, and retain a talent pool of employees, in order to ensure a continuity of leadership for all critical positions. Succession planning is a specific strategy, which spells out the particular steps to be followed to achieve the mission, goals, and initiatives identified in workforce planning. It is a plan that managers can follow, implement, and customize to meet the needs of their organization, division, and/or department. Succession can be from within or from outside the organization. Succession by people from within gives a shared feeling among employee that they can grow as the organization grows. Therefore organization needs to encourage the growth and development with its employee. They should look inward to identify potential and make effort to groom people to higher and varied responsibilities. In some professionally run large organizations, managers and supervisor in every department are usually asked to identify three or four best candidate to replace them in their jobs should the need arise. However, the organization may find it necessary to search for talent from outside in certain circumstance. For example, when qualified and competent people are not available internally, when it is planning to launch a major expansion or diversification programmes requiring new ideas etc. Complete dependence on internal source may cause stagnation for the organization. Similarly complete dependence on outside talent may cause stagnation in the career prospects of the individual within the organization which may in turn generate a sense of frustration. Succession planning provides managers and supervisors a step-by-step methodology to utilize after workforce planning initiatives have identified the critical required job needs in their organization. Succession planning is pro-active and future focused, and enables managers and supervisors to assess, evaluate, and develop a talent pool of individuals who are willing and able to fill positions when needed. It is a tool to meet the necessary staffing needs of an organization/department, taking not only quantity of available candidates into consideration, but also focusing on the quality of the candidates, through addressing competencies and skill gaps. In a recent interview, Tim Cook, CEO of Apple shared his view on succession planning saying, “I see my role as CEO to prepare as many people as I can to be CEO, and that’s what I’m doing. And then the board makes a decision at that point in time.” Apple has seen the importance of having a proper succession plan in place to ensure that there are no problems when it comes to leadership in the company. http://www.iaeme.com/IJM/index.asp 55 editor@iaeme.com
Exploring and Designing an Appropriate Succession Planning Model 2. LITERATURE REVIEW Robert Barnett and Sandra Davis (2008) have discussed that the prevalence of formalized succession planning practices in organizations are increasing, largely due to changing demographic and related trends. A practical, five-step approach to succession planning was proposed to help organizations to look into and prepare for the future more effectively, specifying the future requirements for their leaders. Ali Deghanpour, Ahmadreza Sanjari Karahrudi and Vahid Nasehifar (2011) evaluate the effects of succession planning as an organizational level intervening program on career attitudes as individual level variables. A 22-item questionnaire was developed to measure the extensiveness of succession planning. Also the scale for measuring succession planning extensiveness was developed which was used to gain a better understanding of status quo of succession planning in organizations and gap analysis which is generally one of the early stages of every organizational development project. Susan D Hewitt’s (2009) purpose is to raise the profile of deep succession planning to identify key talent. Older workers are forming a significant proportion of the workforce. This cohort could be lost to retirement leaving industry and commerce short of talent. The main implications of this paper are that organization‐deep succession planning is a complex process requiring commitment and long term planning at all levels. Without a thorough analysis of age and skill profile no workable plan can be made. John F. LeCounte, Leon C. Prieto and Simone T. A. Phipps Middle (2017) have expressed their view to review succession planning for the role of chief executive officers (CEO) in organizations. They emphasise the importance of talent management policies and practices as it relates to leadership pipelines, and provide a conceptual framework that organizations can adopt to ensure that they will always be prepared for CEO succession and maintain a competitive edge. Mrs.Ch.Gowthami (2012) opines that succession planning process is an ongoing development of employees that ensures a smooth transition and minimal loss of efficiency when a vacancy occurs in the department. She highlights the initiatives taken by the organizations in identifying their successor. The study depicts the extent of Succession Planning in organizations in select countries like USA, Canada and India. E.Michael Donner III, Daniel Gridley, Sidney Ulreich and Edward I Bluth (2017) have putforth their view that transition of leadership within radiology practices is often not a planned replacement process with formal development of potential future leaders. A structured system to accomplish succession planning is required, including mentoring, structured socializing, and formal education with training programs including accountability of the program through the group leadership. To ensure the successful development of a succession plan, leadership must commit to develop and execute a strategic succession plan. A.H.Masthan Ali and Dr. P.Premchand Babu (2015) have analysed the fact that Software Organizations often fail to utilize lower level and middle level personnel effectively for leadership development and succession planning systems, and many execute these critical practices through separate human resource functions that shift the responsibility for leadership development away from line managers. Ahsan M (2018) has done his research to analyze the impact of Effective Recruitment and Selection along with succession planning towards leadership development, employee retention and talent management towards organization effectiveness in Pakistan. How recruitment and selection play the key role in the contribution towards leadership development, employee retention and talent management in Pakistan. http://www.iaeme.com/IJM/index.asp 56 editor@iaeme.com
Dr. Revathy Shivashankaran and Dr. Anni Arnav Dr.Suruchi Pandey and Mr.Deepesh Sharma (2014) have emphasized the need for succession planning. The talent management process attracted the most investment. The management should consider creating a talent pool at initial level, which can be developed over time to meet talent needs. The talent pool should be based on two aspects, i.e. performance and potential of employee. Performance rating can be used as input for performance. Succession planning as a process is dependent on integration with other process to give an efficient output. 3. STATEMENT OF THE PROBLEM “Exploring and designing an appropriate succession planning model” is the title of the study. Succession planning establishes a process to recruit employees, develop their skills, and prepare them for advancement, all while retaining them to ensure a return on the organization's training investment. Succession planning involves understanding the organization's long-term goals and objectives, identifying employee development needs, and determining trends. The purpose of succession planning is to identify and develop people to replace current incumbents in key position for a variety of reasons like superannuation, resignation, promotion, diversification and creation of new position. This study would necessitate the process of designing a model to succession planning. 4. OBJECTIVES OF THE STUDY The prime objectives of this study are:  Find out the significant competencies required for succession planning process.  Explore the effective succession planning process relationships.  Design a model for succession planning process. 5. SIGNIFICANT COMPETENCIES REQUIRED FOR SUCCESSION PLANNING PROCESS Significant and necessary competencies need to be identified for succession planning to assess, develop, and retain a talent pool of employees in order to ensure a continuity of leadership for all critical positions. The following competencies may be considered for succession planning in four main components, including: i. Personal attitudes: Self-confidence, attitude towards development, professional ethics, creativity and innovation, attitude towards change and learning; ii. Intellectual foundations: Business thinking, understanding the job role the extent of thinking, judgments and decision makings; iii. Interpersonal skills: Teamwork, customer orientation, communication, influence, and relationships; iv. (iv) People and tasks Management: Performance management, conflict management, leadership and training the others (Abolala’ei & Ghafari, 2007). v. Boak & Coolincan (2001) in their review identified six leadership competencies that each one represents a set of behaviors. They include: strategic activity, influencing the others, actions, decisions, team reformation with high performance, assessment and learning. 6. EFFECTIVE SUCCESSION PLANNING PROCESS Succession planning is any effort designed to ensure the continued effective performance of an organization, division, department, or work group by making provisions for the development, replacement and strategic application of key people over time. It aims to attract http://www.iaeme.com/IJM/index.asp 57 editor@iaeme.com
Exploring and Designing an Appropriate Succession Planning Model the best talent, retain those individuals, and develop them through well-targeted development efforts. Succession planning helps build the bench strength of an organization to ensure the long-term health, growth and stability. An effective successive planning process may contain the following steps: 1. Establishment of measurable goals to guide the succession planning program with close alignment of the measurable goals of the succession planning program to the organization's measurable strategic goals is necessary; 2. Recalibrating the succession planning program goals on an annual basis in accordance with the changing competitive and organizational conditions and priorities is mandatory; 3. Preparation of the current job descriptions is required so that the work to be performed is clear; 4. Preparation of competency models according to the hierarchical level on the organization chart by using a rigorous examination of objective performance requirements should be performed. Planning for future competencies that are necessary to achieve future strategic goals will ensure all competency models are clear and measurable; 5. Careful definition of the roles to be played by each key stakeholder group in the succession planning process is essential. Key stakeholders include the Board of directors, CEO, senior executives, middle managers, supervisors, and even workers. Keeping senior managers and other stakeholders engaged in the succession planning program by establishing clear, measurable accountabilities would be of great help to the organization; 6. Establishment of talent pools by levels based on the strategic strengths of the organization is necessary; 7. Taking an inventory of the talent pool will ensure that individual strengths and areas for improvement are recognized. Conduction of talent reviews on a continuing basis will ensure that promotable individuals are being properly developed over time. 8. Evaluation of the entire succession planning program on a regular (usually annual) basis would help to compare processes and results against the measurable succession planning goals established at the beginning of the yearly planning cycle. 7. SUCCESSION PLANNING PROCESS RELATIONSHIP MODEL Succession planning is all about the preparations of an organization in order to tackle uncertainties in the future and to be ready for business continuity planning in crisis. The situation of 2008 recession can be recalled to understand as how many organizations were prepared to handle to such emergency. The succession planning process and the different aspects in it are interrelated to fine tune an individual to suit into the requirement of the particular organization and deal with caution. The below model is suggested to cater to this need. The succession planning process relationship model has three directions with creative orientation, future orientation and competency orientation. http://www.iaeme.com/IJM/index.asp 58 editor@iaeme.com
Dr. Revathy Shivashankaran and Dr. Anni Arnav Identifying a suitable person with competency orientation is a prority. Competency has been assuming a major role in organizations from 1990’s due to its vibrant essentiality. The employees and management personals are hired with required skills sets, but actual knowledge, skills and attitude is understood once the employee starts performing on the job. Sometimes it might be a skill mismatch or wrong person in the wrong place which will trouble all the stakeholders in the business if sidelined. Attitude matters a lot for thinking about organization as a leader and the level of involvement and commitment he/she shows towards it. The search committee or the management shall look into it at the appropriate occasions to witness the same in reality. Adapting to the new organizational culture and evolving as an individual is supreme to continue the legacy of the organization, its core values and ethics. The leadership style is influenced by the environment and experiential learning. The learnt practices is imbibed in a person in such a way that he would be looking at doing things in a creative manner. On the other hand, everything would be new and very much not influenced by the way he or she has learnt it. Creativity is the essence of dealing with innovative practices to scale up the organizational success. Strategic perspectives and predictive analysis is an imperative to think about the futuristic actions. Thus, Career, future and competency orientations form the required foundations of succession planning process model. All the three orientations would enable the leader to take over the responsibility as a successor in the organization. 8. CONCLUSION The succession planning requires confidence in performing and taking necessary decisions with required tasks in all the situations. A leader can be a strategist but it won’t be sufficient to fulfill the demand of uncertainties and an established team or a group to tackle the challenges. Leading the effective team needs personal learning and mentoring over a period of time which cannot be ignored without certain orientations in the organizational set up. Relationships should be built and the leading skills should happen simultaneously to be successful. REFERENCES: [1] Abolalai B & Ghafari A, 2008, “Future managers: talent plans and succession planning”, Organization of industrial management, 2(3), PP 23-24. http://www.iaeme.com/IJM/index.asp 59 editor@iaeme.com
Exploring and Designing an Appropriate Succession Planning Model [2] Ahsan M, 2018, Effective Recruitment and Selection along with Succession Planning towards Leadership Development, Employee Retention and Talent Management in Pakistan; Journal of Entrepreneurship & Organization Management, 7:233, Vol 7(1), DOI: 10.4172/2169- 026X.1000233, Pg: 1-8. [3] Ali Deghanpour, Ahmadreza Sanjari Karahrudi and Vahid Nasehifar, 2011, Succession planning and its effects on employee career attitudes: Study of Iranian governmental organizations: African journal of business management, Volume 5: Pg 3605-3613. [4] Boak G & Coolican D, 2001, “Competencies for retail leadership: accurate, acceptable, affordable”, Leadership and organization development journal, 22(5): 216. [5] Mrs.Ch.Gowthami, 2012, Succession planning a need or a necessity – a global perspective, International Journal of Management, IT and Engineering; Volume – 2, Issue – 9, ISSN: 2049- 0558; Pg 341-352. [6] John F LeCounte, Leon C Prieto and Simone T A Phipps Middle, 2017, CEO Succession Planning and Organizational Performance: A Human Capital Theory Approach, Journal of Leadership, Accountability and Ethics Vol. 14(1) 2017: Pg 46-57. [7] A H Masthan Ali and Dr P Premchand Babu, 2015, Succession Planning and Leadership Development in Software Organizations (With Reference to Select Leading Information Technology Companies in Bangalore), European Journal of Business and Management; www.iiste.org; ISSN 2222-1905 (Paper); ISSN 2222-2839 (Online); Vol.7, No.1, Pg: 311-320. [8] E Michael Donner III, Daniel Gridley, Sidney Ulreich & Edward I Bluth, 2017, Succession Planning and Management: The Backbone of the Radiology Group’s Future; Journal of the American College of Radiology: JACR, ISSN: 1558-349X, Vol: 14, Issue: 1, Page: 125-129. [9] Robert Barnett and Sandra Davis, 2008, Creating Greater Success in Succession Planning: Research Article, Volume: 10 issue: 5, page(s): 721-739; Article first published online: October 1, 2008; Issue published: October 1, 2008) https://doi.org/10.1177/1523422308322277 Advances in Developing Human Resources: ISSN: 1523-4223; Online ISSN: 1552-3055. [10] Dr.Suruchi Pandey and Mr.Deepesh Sharma, 2014, Succession Planning Practices and Challenges: Study of Indian Organisations: Procedia Economics and Finance, Vol. 11, 152 – 165, (2014). Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/3.0. [11] Susan D Hewitt, 2009, Emerald Group Publishing Limited 2009, Published by Emerald Group Publishing Limited, Susan D. Hewitt, (2009) "The secrets of successful succession planning in the new age wave", Industrial and Commercial Training, Vol. 41 Issue: 4, pp.181- 186. http://www.iaeme.com/IJM/index.asp 60 editor@iaeme.com