Many respected experts on effective leadership have reported that the hallmark of every successful organization is not only the caliber of its leadership, but also the continuity among those who lead their organizations toward higher levels of performance. Yet, among our American workforce, there is a declining attachment to employers. Across all levels of organizations, a less loyal and less knowledgeable labor force can have a profoundly negative effect on these organizations’ productivity and profitability.
Unfortunately, the absence of established and effective succession planning exposes organizations to needless and avoidable breaks in continuity. It also predisposes them to lose business opportunities and revenue, unnecessary turnover, and decreased productivity. Such breaks result in an experienced leader being replaced by an individual requiring a “learning curve,” the new leader being unfamiliar with the culture, internal politics, unique product or service offerings, and the history of how things are accomplished in that organization. Also, without formalized continuity planning programs, leaders tend to choose successors whose backgrounds and leadership styles are similar to their own and who are not likely to meet their organizations’ longer term needs.
In contrast, effective succession planning offers many benefits. Research has found that those organizations providing clear opportunities for professional growth and that promote from within are significantly more profitable and successful. Giving employees these opportunities for career growth and development often leads to increased customer and employee satisfaction, productivity, and retention.
The following guidelines are suggested as part of effective succession planning:
- Obtain buy-in from key stakeholders because your program will be limited by the extent to which you have garnered their support.
- Assess current progress and identify the organization’s future talent requirements.
- Give particular attention to the disparity between your organizational strategy and the competency of the leaders who will be required to implement it. Programs must be designed to address these gaps and reinforce the organization’s core values and philosophy.
- Determine which organizational levels you want to include, establish program priorities, and develop a roll out strategy with timelines.
- Seek to refine the process through a systematic review of the program’s effectiveness against predetermined benchmarks.
Another key to effective succession planning is your organization’s ability to differentiate those employees who are most likely to develop and meet your needs from those who will not produce the desired return on your investment. This is especially critical with your leaders, as our recent national research found that the cost of promoting the wrong person can easily cost you six to ten times his or her annual salary. In contrast, those organizations with established succession planning programs are four to six times less likely to need to search external talent pools for replacement of senior leadership. One way to encourage those charged with ensuring the continued, long-term success of organizations is to ask them: “What would your organization do if it suddenly lost one or more executive team members?”
As the Western Maryland Health System was embarking on the next iteration of our strategic plan, I wanted to be sure that I had the right executives responsible for the right areas throughout the organization. I also wanted to have a viable succession plan to share with the Board at the end of the engagement. I made a series of inquiries as to which consultants some of my colleagues have used to perform a similar engagement for their organizations in the past. After reviewing several firms, I determined that Synergy was the best fit for my particular need.
The entire engagement was very well done and accomplished all of the objectives that were pre-determined at the onset of the Synergy engagement. Through a needs analysis, a variety of assessments and profile work all performed by Synergy, I was able to determine which executives were best suited for the positions in the organization. Much of the work determined that individuals were in the right positions however, several changes were made in areas of responsibility to best suit the person as well as the organization going forward. The engagement culminated with a presentation of the outcome of Synergy’s work product, a revised organizational chart and the new succession plan for executive leadership to the board.
Overall, I was extremely pleased with the work performed by Synergy as well as the outcome of the engagement. I would highly recommend this firm in that what they set out to accomplish ended up exceeding my expectations and the overall value was excellent.
Barry P. Ronan, FACHE, President & CEO, Western Maryland Health System
Evidence-Based Succession Planning Case Study
Several of the senior executives in a large, metropolitan healthcare system were approaching retirement age. There was no current system for filling the leadership positions when they were vacated.
We worked with the senior executives to identify the necessary skills and resources to achieve their organization’s strategic plan. We led workshops to help the company anticipate future changes that might be required in the organizational structure, preparation for reorganization, and plans for growth.
Leaders nearing retirement were identified, and the likelihood of other leaders remaining in the organization was assessed. We then reviewed the current workforce and listed high potential managers and developed plans for their career paths. This was done by achieving consensus as to the high potential candidates — managers who excelled in their current positions and were still climbing.
These candidates were evaluated for the knowledge, skills, and abilities necessary to perform competently in their current roles. Logical next positions to which each candidate would likely be promoted were defined, and a detailed job analysis using job evaluation technology was performed to evaluate the knowledge and problem solving skills that would be required in the position.
Developmental objectives with follow-up action plans were defined, mentors were assigned to monitor progress, and annual reassessment schedules were put in place.
The outcome of this process was a more robust leadership team and support structure that was ready to meet future challenges of the organization. This approach has helped create a more focused, proactive, and confident management team.
Learn more about the Synergy Screening System®.
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