Over time, all enterprises evolve and grow around the vision, skill and enthusiasm of the people who lead and manage them. The business gradually becomes an embodiment of their judgement, values and decisions.
If they retire or exit for other reasons, the ethos and dynamics of the business will inevitably change. If the value of the business is to be maintained or enhanced, it is imperative these changes are carefully controlled.
The first step is to formally decide precisely what difference their departure will make. If the retiring directors/managers were responsible for sales dynamism, strict financial control, key account customer loyalty or engineering innovation, for example, these are the critical skill gaps which will need to be seamlessly filled.
Looking inward for future success
The assumption is companies will need to recruit externally to fill
operational gaps arising as they undergo change. This is not necessarily the case.
External HR professionals can be brought in to work as change
managers. They can identify current or anticipated gaps in managers'
range of skills and employees' competencies and then develop the most
cost efficient ways to fill these gaps.
But there is more to succession planning. Rather than just being a way
of averting the dangers of a foreseeable motivational and management
vacuum, it can be an opportunity to refresh, revitalise or reposition a staid enterprise in a rapidly changing world.
I strongly believe businesses can move forward by optimising the
contribution of their existing management, staff and workforce. It is
highly likely existing personnel will have undiscovered capabilities and talents. But the fact these attributes have not become apparent in their existing roles is probably more to do with habit and complacency than a failure to invest in employee development.
It might be the case they have simply not been invited to extend
themselves in an unfamiliar direction or take on wider responsibilities.
It is definitely the case that uncovering unsung talent in existing
staff is less costly than recruiting and introducing new personnel.
Job
rotations can sometimes reveal these hidden reservoirs of ability.
Perhaps someone on your sales force has the potential to become an
outstanding marketeer; perhaps someone from your shop floor or office
has the potential to be an outstanding sales generator. An operative
might have innate interpersonal skills which earmark him or her for
development into line management.
How to boost existing employees' skills
In some instances, the skills shortfalls can be filled by job rotation.
Skills shortfalls in one department can be overcome by importing them
from another where a competent individual's ability is being
under-utilised. There are huge savings to be made by offering coaching,
mentoring or further job training to existing staff.
As an alternative to launching into a recruitment drive, taking positive
and structured training action can expand the skills set of employees
and identify and improve areas which require development.
My definition of coaching is not merely structured learning. It is more
to do with supporting individuals and teams on their developmental
journey - helping them to become the people they want to be and achieve
the success they aspire to. It's a question of focusing on their true
future potential and how it can be realised.
Similarly, I see mentoring as the passing on of knowledge by a more
experienced person to a less experienced one. Again, it's not so much
about structured learning; more about enabling through providing
guidance, support and understanding.
External or interim HR consultants can provide mentoring and coaching on
a stand-alone basis, either to supplement a training course or as part
of a larger-scale training and development programme.
The benefits of investing in existing employees
Investing in existing employees and working to improve their skills can
prove hugely beneficial to an organisation. Apart from the obvious time
and money savings there are numerous other aspects which can impact on
the corporate ethos and performance.
Employees' perceptions of their career progression prospects change.
They will obviously be prepared to make a deeper commitment to an
enterprise which demonstrably invests in them and their route to
achieving their personal ambitions, perhaps through promotion.
It also inculcates the wider perception that, as others advance, the gaps they
leave will create promotion opportunities for their immediate delegates
rather than outside recruits. This creates a sense of career scope and
momentum among the whole workforce.
This should be an ongoing process. Trainers, coaches and mentors need to
do far more than recite prescribed catch-all programmes. They should
take time to get to really know their client's business and absorb its
culture as a prerequisite of cultivating teamwork and enhancing
productivity.
It is about identifying people who have the capability to fulfil key
roles both now and in the future; knowing who could step in immediately,
who could be an asset to the company in a couple of years time and who
is likely to be leading the company forward in the longer term.
Background, qualifications and experience only paint part of the
picture. The qualities which make people exceptional managers, leaders,
drivers and visionaries are somewhat more elusive. You don't get
certificates in perseverance, determination, emotional intelligence and
resourcefulness. Years of service which may be attributed to the
individual's lack of enterprise and ambition might actually be due to
unwavering loyalty or the lack of real opportunity to develop.
Assessment
Internal recruitment for senior or critical positions is vital to the
future of the organisation and needs to start some considerable time
before the expected succession occurs so the transfer of responsibility
can be a gradual process rather than a sudden dramatic event.
After finding out what competencies a particular company needs to
achieve its goals, HR advisors can devise exercises to identify and
develop strengths, and remedial programmes to overcome shortcomings
where there is need for improvement.
A precise psychometric assessment of an individual's range of skills and
capabilities will define their suitability for bridging the gaps which
they will be required to fill. The objective is to get the closest
possible 'fit' between the under-utilised potential and operational
shortfall.
If it eventually transpires existing employees do not have the skills or
potential to fill a role, it may be necessary to seek guidance in
recruiting candidates who match the exact requirements of a particular
role and culture of the company.
Failing to prepare is preparing to fail
The key to future success lies in assessing and understanding the value
of the human resources you have at present and what resources you are
likely to need in the coming years. The future performance of any
company is reliant on the thoroughness and vigour of today's succession
planning. Those with an interest in acquiring or merging with an
existing business must put a finite value on it.
Any investor will agree running a slide rule over the fixed assets, past
performance and future profit expectations of a target company is
comparatively straightforward. What really interests them is the
quality of the next generation of management and its preparedness to
propel the enterprise to new heights.
Every management hopes it will be able to bring about a smooth transfer
of control after an acquisition, merger or other transaction. Having
competent and consistent management and an able workforce in place from
day one will be a decisive factor in negotiations. It will influence
the viability banks and equity houses place on the entire deal and the
fiscal value placed on the business.
Careful planning also means your workforce will be less unsettled and
disrupted.
In short, if you want to boost the value and saleability of your
business for the future, start planning for and building the next
generation of human resources right now.
