CBTM #7: Succession Planning – Where the Present Meets the Future


Today’s guest post is from Dalip Raheja of The MPower Group, who declared that Strategic Sourcing is Dead last year and who has returned to give us one of his alternatives.

I’m sure you expect us to say this but it’s worth repeating: Succession Planning has to be part of an overall Competency Based Talent Management (“CBTM”) strategy. We start with the basic premise of Succession Planning which is ensuring that you have sufficient qualified bench strength for key roles in the future. This means that you need to know what your key roles are and the competencies you need so you can determine if you have qualified candidates. By the way, those competencies need to be defined for the future, not today. All of this requires a CBTM strategy to ensure that you have managed the significant risk of not having the right talent when you need it. To further illustrate this point, your Succession Planning process will need to be tightly integrated with your recruiting process to ensure that the right types of competencies are being used to select potential candidates.

If you truly believe that your people are at least one of your critical assets, then why would you not manage your risk of replacing those critical assets, especially when these assets can walk away at will and there really is no expected life of that asset for you to plan around? It would seem to me that the risk of replacing these assets is far greater than any other asset in your organization? Yet we continue to absorb that risk without any mitigation plan? And this is not a risk that you should pass on to your HR partners to manage on your behalf. You should lead this just as you would your overall CBTM strategy and actively use your HR partners as consultants. Please do manage your expectations in dealing with your HR department as most of them are not geared up for this kind of work yet. You actually will be leading them in some cases and become the test bed, and leader, for the rest of the company

Successful Succession Planning necessarily starts with an understanding of what your future competency needs are for key roles and then designs a strategy that encompasses both an internal and external sourcing process. While some of the “high potential” programs do an adequate job of at least identifying some of the replacement candidates, even fewer have a pro-active process in place for their success. “High potentials” cannot be a replacement for a Succession Planning strategy within the context of CBTM. A comprehensive understanding of your company’s long term business strategy is critical to knowing what your future competency needs are going to be. If your company is going to be much more active in the global market than it is today, then your Succession Planning strategy of replacing Joe, who is your most critical employee today with Joe’s competencies, will expose you to significant risk. And if those competencies are not present in your organization, then you will have to start developing them internally and acquire them externally to manage your overall risk.

Let me try and conclude the conversation with some quick summary thoughts on a very complex issue. Succession Planning:

  • must be part of an overall CBTM strategy – the core of this process and the first step is a competency model for the future that is tightly integrated with your company’s long term strategy
  • must be approached as the management of a significant risk of a critical asset and therefore must be sponsored at the highest levels and directly led by you, not HR
  • cannot be replaced by a “high potential” program
  • must incorporate both internal and external sourcing strategies
  • is not a periodic event but an integrated, pro-active, ongoing process
  • has a retention programs as a key component

A successful Succession Plan as part of an overall CBTM strategy is key to sustainable value creation. It will also position you as an innovative leader in your company and position your organization as adding value beyond the confines of a narrow functional definition. Your organization will also be looked at as a leadership factory where other executives come to pluck the best candidates to seed their organizations.

If you are interested in getting involved or would like to follow this topic further, here are a series of critical activities coming up:

  • Release of the results of the Executive Forum we just facilitated at the IACCM Global Forum for Contracting & Commercial Excellence on Talent Management.
  • A major research project to not identify the problem one more time but to identify Next Practices to solve the problems.
  • A webinar with IACCM on CBTM.
  • A White Paper to focus on Next Practices in CBTM.

Please contact Crystal Jones at crystalj <at> thempowergroup <dot> com for more information.