Succession Planning
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From Global Organization development Summit (GODS) held last month, it was worth noting that one of the challenges facing the organizations today is succession planning. (Succession planning can be broadly defined as identifying future potential leaders to fill key positions)
It is imperative that in all organizations discounting the size of the organization or the area of operation, it is important to have people with the right skills to fill key and top leadership jobs. Traditionally most of the companies did fill the key positions from within the organization through mostly secretive approach, which was successful, thanks to the stable markets and and belief among the employees in long-term career. However globalization and liberalization has fuelled the growth of economies generating numerous job opportunities, but the existing workforce is unable to meet the demands of the market, which has stimulated the human resource professionals to think of succession planning.
Some statistics in favor of the statement are given below:
In 2005, one in seven of the worlds largest companies made a change in leadership compared with only one in 11 a decade earlier.
In the year 2000, a Retention Practices Survey conducted by the Society for Human Resource Management reported that the highest rate of resignations occurred within professional ranks.
By 2005, one in five executives will be eligible for retirement and according to Development Dimensions International, a significant number of companies will see forty to fifty per cent of their executives leave in the next five years.
Xerox forced out Richard Thoman just 13 months after making him CEO. Apple Computer went through three CEOs in quick succession before Steve Jobs returned to set the company straight. Coca-Cola, Philip Morris, and Toys R Us have had to fill their CEO slots twice in less than three years. Mattels Jill Barad held the top job for just two years before investors made their lack of confidence crystal clear.
Why is succession planning important?
Having a succession plan in place is very important to an organization because the individuals identified will be ultimately responsible to take on the future challenges the organization would face. This will also ensure that the organizations are a step ahead of their competitors. For example, Jack Welch, one of the most admired CEOs of General Electric puts forward his thoughts about succession planning in the following manner “From now on, choosing my successor is the most important decision Ill make. It occupies a considerable amount of thought almost every day”. This is a pretty strong statement from a person who helped GE boost its sales by over 3000% during his tenure.
So, how do we implement