I know you don’t want to read about it. I don’t even want to write about it. But in a marketplace where there is constantly increasing competition for procurement professionals and where consultants are able to command $1000/day, and more, you face a constant risk of losing your most talented people to your talent-hungry competitors, especially if you don’t have good incentive plans in place that will allow your employees to earn bonuses relative to their performance. (Considering that every dollar they save is generally worth at least five sales dollar relative to the bottom line, is performance-based compensation really a stretch?) Given this harsh reality, I think this is a topic worth discussing – and a great way to kick off the talent series and get those gears grinding.
The reason I’m getting to it now is that I was poking around my favorite analyst site (Aberdeen Group*) and stumbled upon the recently released Market Alert The Key To Talent Development: Halogen Adds Succession Planning Functionality to its Employee Performance Management Suite. The brief quotes Aberdeen’s Enterprise Talent Management report that identifies a number of challenges companies are facing in their development of the next generation of leaders. The two biggest challenges (at 61% and 56%, respectively), are lack of funding for leadership development and an inability to locate or create a talent pool of candidates.
The first problem is easily solved – recognize the need for talent and invest accordingly – after all, a solid investment in your people will pay for itself in increased productivity, which translates to hard dollar savings when we are talking about procurement personnel. The second problem is more difficult – attracting people is hard, and turning them into tomorrow’s leaders is harder. That’s where succession planning comes in. By figuring out the skill sets you will need to replace your current staff, you will identify the training and mentoring that your new hires need today to become your leaders tomorrow. That way, even if your best people leave or get poached, you will have leaders ready to take their place.
The Aberdeen brief also notes that to truly be successful, companies need to be committed to long term strategic succession planning that incorporates the following key elements:
- support from the CEO and top executives
- creation of a talent mindset
- creation of a performance culture
- ensurance of data-driven decision making
- development of a “learning organization”
- alignment with the overall strategic plan of the company
- organizational readiness
In other words, it’s more than just a one time effort and more than just the adoption of a technology solution – although a solution that can be integrated with talent management processes such as employee performance management, training, and assessment could be of significant value. So I’d recommend that if you haven’t started working on a succession plan, that you start today. I know it often leaves a bad taste in the mouth, but I can assure you that’s preferable to walking in to work one day and finding yourself without a leader to carry the business forward. And in the future, I think it will be a fundamental part of talent-focused organizations who solve the talent problem. After all, if everyone has access to the same knowledge, training, and experience, then, if you believe everyone has potential, everyone can eventually become leaders in their own business domains.
* This was written pre-acquisition announcement
** Note to AMR: if you want to know why, contact me. (thedoctor <AT> sourcinginnovation <DOT> com)