Chapter 1
What is Succession Planning and Management
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Defining Succession Planning and
Management
• Organizations need to plan for talent to assume key leadership (or
backup positions) on a temporary or permanent basis.
• Henri Fayol (1841–1925) was the first to recognize that management
has a responsibility to ensure the ‘‘stability of tenure of personnel.’’
• Fayol believed that if that need is ignored, key positions would end
up being filled by ill-prepared people
• It was part of Fayol’s classic 14 points of management. (Home
Assignment )
• Succession planning and management (SP&M) is the process that
helps stabilize the tenure of personnel.
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• It is perhaps best understood as any effort designed to ensure the
continued effective performance of an organization, division,
department, or work group by providing for the development,
replacement, and strategic application of key people over time.
Case Study
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Defining Succession Planning
1. Succession planning is the process of identifying the critical positions
within your organization and developing action plans for individuals to
assume those positions.
2. Succession planning is a strategy for identifying and developing future
leaders at your company — not just at the top but for major roles at
all levels. It helps your business prepare for all contingencies by
preparing high-potential workers for advancement
3. Succession planning is a process and strategy for replacement
planning or passing on leadership roles. It is used to identify and
develop new, potential leaders who can move into leadership roles
when they become vacant.
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4. Means of identifying critical management positions, starting at the
levels of project manager and supervisor and extending up to the
highest position in the organization. Succession planning also
describes management positions to provide maximum flexibility in
lateral management moves and to ensure that as individuals
achieve greater seniority, their management skills will broaden and
become more generalized in relation to total organizational
objectives rather than to purely departmental objectives.(Rothwell)
5. Clutterbuck (2012) builds on Rothwell's definition, and redefines
succession planning as “dynamic process of aligning employee
aspirations and talents with the constantly evolving needs of the
organization and of providing employees with the resources and
support they need to grow into new roles.
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Succession Management
• Planning in isolation is nothing. It must be coupled with succession
management
• Four Functions of Management and their application in HRM
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Organizing in HRM
• It involves developing an organizational structure to ensure the
accomplishment of the organizational goals.
• The structure is usually represented by an organization chart, which
provides a graphic representation of the chain of command within an
organization
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Leading in HRM
• Leading involves the social and informal sources of influence that you
use to inspire action taken by others.
• If managers are effective leaders, their subordinates will be
enthusiastic about exerting effort to attain organizational objectives.
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Controlling in HRM
• Human resource controlling evaluates activity in the extent of
selecting potential candidates, their development in relation with the
workplace, and retaining the employees by planning their career,
respectively by the development within the company.
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Succession Management
• Succession management refers to talent management in
organizations
• It focuses on continuing, daily efforts to build talent and may include
the manager’s role in coaching, giving feedback, and otherwise
helping individuals realize their potential.
• Both succession planning and succession management emphasize
the importance of developing internal talent to meet current or
future talent needs of the organization.
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SP&M
• SP&M is important for all positions irrespective of senior
management positions
• Effort should also address the need for critical backups and individual
development in any job category—including key people in the
professional, technical, sales, clerical, and production ranks
• Even more important where high performance and high work
engagement environment is cultivated
• Important when decision making is decentralized, and leadership is
diffused throughout an empowered workforce, proprietary technical
knowledge accumulated from many years of experience in one
corporate culture is key to doing business, and personal relationships
critical to work are passed on from departing workers to their
successors. 11
• One aim of SP&M is to match the organization’s available (present)
talent to its needed (future) talent.
• Another is to help the organization meet the strategic and operational
challenges facing it by having the right people at the right places at
the right times to do the right things to get the right results.
• SP&M should ensure that the lessons of organizational experience—
what is sometimes called institutional memory—will be preserved
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Distinguishing SP&M from
Replacement Planning
• SP&M and Replacement look compatible and overlapping terms but are
different
• Replacement is basically risk management
• The chief aim of replacement planning is to limit the chance of
catastrophe stemming from the immediate and unplanned loss of key
job incumbents.
• SP&M is proactive attempt to ensure the continuity of leadership by
cultivating talent from within the organization for implementation of
strategic plan.
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Distinguishing SP&M from Workforce
Planning
• Workforce planning connotes comprehensive planning for the
organization’s entire workforce
• The approach is to fill the vacancies as these are becoming vacant or
demanded to do the work by people in the organization
• Organization builds up a large number of legacy employees who may
be ill-suited to get strategic objectives
• Succession planning and management may be confused with top
positions and planning and development to fill them
• SP&M refers more broadly to planning for the right number and right
type of people at every level 14
Distinguishing SP&M from Talent
Management
• Talent management is the process of hiring and developing, as well as
developing strategies associated with those activities in organizations.
• Some organizational leaders associate talent management with
managing the best-in-class talent of the organization—the upper 1 to
10 percent
• It refers to investing money where the returns are likely to be greatest
—that is, on high-performing, highly knowledgeable, or high-potential
talent at any organizational level.
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Distinguishing SP&M from Human
Capital Management
• HCM professes that individuals have economic value
• They are calculated players who can bring in greater profits for the
organization and hence are important
• HCM treats them as commodities “People are our greatest assets’’
• No consideration for …
• They carry knowledge and bring creative thinking for innovations
• They carry institutional memory
• Social relationships
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Making the Business Case of SP&M
• Sustainability is the greatest challenge for business organizations
• One key requirement is that well-qualified replacements must be
available as quickly as possible to assume critically important positions
as they become vacant.
“succession planning, is like a relay race; has to do with passing
on responsibility. . . . Drop the baton and you lose the race.’’
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Reasons for Growing Importance of
SP&M
1. Strategic success is a function of having the right leadership. Leaving
the development of those leaders to chance and depending on
headhunters to find replacements for key people will not work in
this time.
2. Second, as continuing downsizing and other cost-containment
efforts have decimated the middle management ranks—a
traditional training ground and source of top management talent—
there are simply fewer people available to advance to the top ranks
from within.
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3. When SP&M is left informal and thus unplanned, job incumbents
tend to identify and groom successors who are remarkably like
themselves in appearance, background, and values. They establish a
‘‘bureaucratic kinship system’’ that is based on ‘‘homeosocial
reproduction.’’
• To avoid these problems and to promote diversity and multiculturalism in the
workplace, systematic efforts must be made to identify and groom the best
successors for key positions, not just rely on managers to clone themselves.
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Some More Reasons
It forms the basis for…
(1) Communicating career paths to each individual;
(2) establishing development and training plans;
(3) establishing career paths and individual job moves;
(4) communicating upward and laterally concerning the management
organization; and
(5) creating a more comprehensive human resources planning system.
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Sustainability Issue
Data from the US Bureau of Labor Statistics shows that approximately…
• 20% of new businesses fail during the first two years of being open,
• 45% during the first five years,
• 65% during the first 10 years.
• Only 25% of new businesses make it to 15 years or more.
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