Pre­par­ing peo­ple for pro­mo­tion

Strate­gic suc­ces­sion plan­ning es­sen­tial as Baby Boomers plan for re­tire­ment

The Guardian (Charlottetown) - - BUSINESS - Joseph Sher­ren, CSP, HoF, CSPGlobal, is CEO of Gate­way Lead­er­ship and Canada's man­age­ment ef­fec­tive­ness ex­pert. For in­for­ma­tion on pro­grams and speak­ers, con­tact Keith McLean at keith@gate­waylead­er­ship.com

This past week I spoke with Dave Duffy, gen­eral man­ager of At­lantic Ad­justers. I asked him: "What do you feel is the big­gest is­sue fac­ing com­pa­nies over the next five years?" His an­swer: "Suc­ces­sion plan­ning".

He said: "We are at a stage where many Baby Boomers are pre­par­ing for re­tire­ment and there is a short­age of in­di­vid­u­als who are ready and able to take on the reins of ac­count­abil­ity".

He went on to ex­plain: "A large part of the prob­lem is our fault. Most busi­ness own­ers and man­agers have not taken the time to think through their re­cruit­ing, hir­ing, train­ing, and men­tor­ing pro­cesses to en­sure the right peo­ple are pre­pared to take on po­si­tions of man­age­ment and own­er­ship. We are just hop­ing they will show up when needed - all trained and ready."

He‘s right. In the US alone there were 76 mil­lion peo­ple born be­tween the years 1946 and 1963, which is the win­dow for the Baby Boom gen­er­a­tion. That means they will prob­a­bly re­tire over the same 17-year pe­riod.

Sim­ple math (not ac­count­ing for deaths and immigration) shows that ap­prox­i­mately 10,000 peo­ple ev­ery day reach re­tire­ment age. Many of them are busi­ness own­ers or se­nior level man­agers.

Be­cause this was fol­lowed by a long pe­riod of re­duced fer­til­ity lev­els in the next gen­er­a­tion, there is now a short­age of in­di­vid­u­als pre­pared to fill those po­si­tions.

Adding to the un­cer­tainty, ac­cord­ing to a sur­vey done by PWC (www.pwc.com), ap­prox­i­mately 80 per cent of Cana­dian com­pa­nies do not have a doc­u­mented suc­ces­sion plan.

Sharon Duguid, who is the di­rec­tor of PWC’s Cen­tre for En­trepreneurs and Fam­ily En­ter­prise, says: "Com­pa­nies that tran­si­tion to the next gen­er­a­tion or a new man­age­ment team with­out a suc­ces­sion plan ex­pe­ri­ence a 29 per cent to 32 per cent drop in busi­ness in the three years af­ter hand­ing over the reins”.

When this hap­pens, it causes stress and con­fu­sion for staff, which in turn af­fects cus­tomers and causes un­cer­tainty. Hav­ing a suc­ces­sion plan al­ready in place will mit­i­gate most neg­a­tive ef­fects and min­i­mize dis­rup­tion to staff and to cus­tomers.

Closer to home, At­lantic Canada’s pop­u­la­tion and work­force are also ag­ing, in­clud­ing those in gov­ern­ment ser­vices. In re­cent years, the num­ber of re­tire­ments in the public ser­vice sec­tor has be­gun to in­crease and this trend is ex­pected to con­tinue for the next sev­eral years.

Los­ing the ex­per­tise of ex­pe­ri­enced em­ploy­ees could sig­nif­i­cantly re­duce ef­fi­ciency, re­sult­ing in costly mis­takes, un­ex­pected qual­ity prob­lems, or sig­nif­i­cant dis­rup­tions in ser­vices and per­for­mance.

A good suc­ces­sion plan in­cludes a strate­gic ap­proach that en­sures the nec­es­sary tal­ent and skills will be avail­able when needed, and that es­sen­tial knowl­edge and abil­i­ties will be main­tained when em­ploy­ees in crit­i­cal po­si­tions leave.

So, how do you pre­pare your or­ga­ni­za­tion for the changes in hu­man cap­i­tal that are com­ing? A vi­able suc­ces­sion plan starts right at the hir­ing stage and has three crit­i­cal com­po­nents:

1) No mat­ter what po­si­tion you are hir­ing for, eval­u­ate the per­son's po­ten­tial to ul­ti­mately take on more se­nior po­si­tions in the fu­ture.

2) Do an ap­praisal of all your cur­rent staff and iden­tify through work per­for­mance and us­ing (sci­en­tif­i­cally val­i­dated) assess­ments your most tal­ented, high-po­ten­tials who have a hu­man­is­tic and col­lab­o­ra­tive mind­set.

3) Once iden­ti­fied, pro­vide (prag­matic) lead­er­ship de­vel­op­ment and man­age­ment train­ing where they can de­velop a strate­gic mind­set and the skills of op­er­a­tional over­sight, crit­i­cal think­ing, peo­ple man­age­ment, and com­mu­ni­ca­tion skills.

My ques­tion for man­agers this week: "Do you have a doc­u­mented plan to de­velop a com­pe­tent suc­ces­sor when the time comes that you de­cide to move on"?

Joe Sher­ren Man­age­ment Mat­ters

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.