Succession Planning is on the Radar
Over the last year, we've seen an ever increasing number of clients recognize they are at risk as key members of their management teams retire or otherwise leave. The difficult economic conditions of recent years caused many companies to focus on more immediate needs, and planning for future leadership changes was pushed to a back burner. Now there are several reasons to make succession planning a higher priority:
- Since the recession ended, businesses have stabilized and slowly returned to more normal operations. As a result, more members of senior management teams have announced their decision to retire. Although delayed by the recession, this is the logical and expected result of the aging of the baby boomer generation. However for many of our clients there has not been a natural successor in place, resulting in the need to conduct an immediate search. This is good for our business, but an earlier search for a less experienced executive might have been a better solution.
- Top talent is always in demand and as the economy has improved, we have seen this trend accelerate. Although we're not fully in the "war for talent" that was predicted a number of years ago, we have seen more examples of executives being courted and leaving for new opportunities. In addition, the recession seems to have resulted in less employee loyalty and increased turnover. Together, a combination of sound succession planning and a focus on employee retention can be an effective tool for minimizing future turnover and dealing with it effectively when it happens.
- Generation X, now between 36 and 49, will be the source of many new leaders. Much has been written about the characteristics of this generation (including their self-reliance, independence and desire for work life balance) but it's important to also recognize that this generation is much smaller than the baby boomers - so the pool of available talent will be smaller as well. Effective succession planning can help mitigate this.
We see succession planning as the process of identifying and developing people with the potential to fill key leadership roles. Ideally those identified will already be employed but, if not, they will need to be recruited as part of the process. Keys to success include:
- Objectively assessing the capabilities and competencies of those with the potential to assume greater responsibility
- Providing developmental experiences to fill in the gaps so key employees are prepared to assume a new role
- Developing a recruiting strategy if the needed talent is not already employed
- Focusing on employee retention as part of the overall plan
- Ensuring that top management supports the ongoing development of its high potential leaders
- Maintaining a database for ongoing use in monitoring leadership development and the pipeline of future management talent
At Gilman Partners, we have started the succession planning process in the past year by adding three partners to our leadership team. We're energized about our future growth, and it feels good to practice what we preach!
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