Succession Planning - A Hot Topic

Succession planning has become a hot topic for several reasons. Times have changed and the workforce has changed. The most comprehensive work on succession planning (SP) has been done by Professor William Rothwell of Penn State University.

In the second edition of Rothwell's (2001) "Effective Succession Planning" he states, "Strategic success is, in large measure, a function of having the right leadership (p. 8)." Rothwell correctly links organizational success and individual success. Many authors have attempted to separate organizational development and individual development. In reality, we cannot separate organizational effectiveness and individual effectiveness.

Organizational effectiveness consultants (like me) and executives (my clients) must never lose sight of the effectiveness of a company's SP. The organization's SP, along with management development and professional development (for attorneys, CPAs, engineers, etc.) programs, must constantly be monitored for relevance and contribution to the implementation of the strategic plan.

Rothwell goes on to comment about how the changing times have changed the importance of SPs. He says, "leaving the development of leadership to chance, and hoping for the best, may have worked at one time (p. 8)." Obviously, leaving leadership development to chance is a mistake. Depending on headhunters to find replacements for key positions is a mistake. Rothwell concludes that we must "ensure that the organization is systematically identifying and preparing high-potential candidates for key positions (p. 8)."

It is important to consider the effects of the wave of downsizing that washed over the corporate world in the 90s. The psychological contract that once implied a secure job in exchange for good work no longer exists. Neither side of the employer-employee relationship can assume any devout degree of loyalty.

The traditional SP was built upon drawing talent from in-house middle-management. But, with fewer people in the middle ranks after the downsizing wave, traditional SP strategies are no longer viable.

Rothwell (2001) believes, "great care must be taken to identify promising candidates early and actively cultivate their development... especially in a seller's market where talented workers can barter their abilities with other companies." (p. 8)

I don't want to give the impression that all companies do SP poorly. One very good example is the SP at BB&T Bank Corporation. BB&T's well-designed and well-implemented SP provided several years of development for its new CFO. I was at BB&T's headquarters the day that its CFO of many years retired. I asked one of the executives if he was concerned. He replied, "No, I am very comfortable. Our new CFO has been well-prepared over the past few years." This speaks very highly of the caliber of BB&T senior management.

For more information on succession planning read Rothwell's (2001) "Effective Succession Planning," or read chapter 6 of my book, "Strategic Organizational Learning."