A New Lens On Succession Planning

A NEW LENS ON
SUCCESSION
PLANNING
RELOOK, REPURPOSE, REDEFINE

TABLE OF
CONTENT
2 Copyright © Accendo Technologies 2020
01. INTRODUCTION
02. TRADITIONAL SUCCESSION PLANNING
The French Origin
3 Things To Do Away With
1. Subjectivity In Decision Making
2. Promotion Only On Performance
3. Succession Planning Only When Required
03. COST OF WRONG SUCCESSION PLANNING
1. Financial Risk
2. The Wrong Candidate
3. Lost Of Knowledge and Expertise
4. Losing Internal Talents
04. A NEW LENS ON SUCCESSION PLANNING
3 New Lenses
1. Success Profiles
2. Measurement and Visualization
3. Dedicated Platform
04. CONCLUSION
3
5
6
8
9
11
12
14
15
16
17
18
19
20
21
24
26
27

01 /// Introduction
The idea of having a leadership
position suddenly become vacant
can have disastrous impacts on
groups, companies and countries. A
mainstream depiction of this can be
seen in the widely popular American
fantasy drama, Game of Thrones;
every time a kingdom is de-kinged
suddenly, a free for all war occurs
from both internal and external
forces wanting to grab the throne.
Which is why many monarchs today
take great importance is planning a
rightful heir.
Whilst not as dramatic as on TV,
when organizations large or small
fail proper succession planning the
impact is just as harmful.
Succession planning has proven through
time to be a practice that can make or break
an organizations future and has also shown
to be able to impact shareholder value
overnight.
In today’s light, succession planning is not
only a must have for organizations but
must also evolve and be agile to adapt
to demanding and constantly changing
business environments.
We need to relook into our succession
planning practices, repurpose why we do
it and redefine what it means as a whole.
We need to put a new lens to succession
planning.

TRADITIONAL
SUCCESSION
PLANNING
02 ///

02 /// Traditional Succession Planning
THE FRENCH ORIGIN
The term “Succession Planning”
unchanged in name until today, was
actually introduced by a French
pioneer of management history
named Henri Fayol who developed
a general theory of business
administration called Fayolism. In his
book Administration Industrielle et
Générale or General and Industrial
Management, Fayol developed 14
principles to management many still
being used today. Amongst those
are remuneration, tenure, team unity
and of course, succession planning.
6
From the days of Henri Fayol to the wide
research of William J. Rothwell and many
more, Succession planning has now
become a core component of long lasting
organisations.
Whilst the definition of Succession Planning
has expanded through the years, the
fundamental idea remains the same; the
right person, with the right skills, is placed in
the right job at the right time.
Copyright © Accendo Technologies 2020

INFO DROP
62% of employees
claim they would be
“significantly more
engaged” at work if
their company has a
succession plan.
SOURCE: www.talexes.com/blog/workforce-development/2017-succession-planning-statistics/

3 THINGS TO DO AWAY WITH
Whilst succession planning still
remains vital in organizations today,
it is important for organizations to
adopt new and improved processes
to better their succession planning.
Traditional succession planning ways
have downsides that severely impact
leadership pipelines and development,
eventually having a big impact on
organizational success.
There are 3 key practices that
companies need to revamp or do
away with in order to groom the
right person into the right roles.
1 // Subjectivity in decision making
2 // Promotion only on performance
3 // Succession planning only when required

1 // SUBJECTIVITY IN DECISION MAKING
EXPLICIT
IMPLICIT
Organizations are sometimes faced
with the need to make decisions with
a lack of information or data. When
faced with this situation in making
people decisions, subjectivity starts to
creep in whether we realize it or not.
Suggestions on who should succeed
into a certain role and why they are
good starts being formed by opinions
instead of facts. Subjectivity can come
in 2 forms:
Whilst conversations and opinions are
always needed in succession planning,
they should be driven by objective
information such as data.
Knowingly being partial to a
person and favoring them by
choice
Unknowingly being partial to
a person driven by our minds
preferences

INFO DROP
Implicit Bias affects
roughly about
90%-95% of
people globally.
SOURCE: www.psychologicalscience.org/observer/the-bias-beneath-two-decades-of-measuring-implicit-associations

2 // PROMOTION ONLY ON PERFORMANCE
Performance of an employee has
historically been the single factor
leading them to be considered a
successor to a new role. Case studies
and research now show us that whilst
performance is an important metric, it
should not be the only factor used in
promotion. An employee performing
well in their current role, may not
necessarily be an indication they will
do the same in the next role.
A succession planning case in Mattel
Inc, the multinational manufacturing
company shows us this. Jill Barad,
who served as CEO from 1997-2000
was catapulted into the role due to her
amazing track record in Marketing.
However, her performance in
Marketing did not give her insights into
the financial and strategic factors in
running a multinational company, and
resigned after a turbulent 3 years for
the company. Many factors aside from
performance should have been taken
into account before Mattel succession
planned.

3 // SUCCESSION PLANNING ONLY WHEN REQUIRED
Reserving succession planning for
times when its only needed can have
serious implications to organizational
performance. Doing this not only
means companies have to very quickly
make a decision on candidates for the
role, but also doesn’t’t give them time
to train and develop a person properly.
This can impact a person performance
in the role, damper their morale and
also cause shareholders to lose trust
for the organization.
An organization that has done this
right and shows that succession
planning needs to be a planned and
structured process is Apple. Steve Jobs
worked hard to prepare Tim Cook
for the role as CEO. Cook took on a
variety of operational roles including
manufacturing, distribution, sales and
supply chain management before
working directly with Jobs to gain
experience in the CEO role.

INFO DROP
Over 90% of workers
between age 18 to 34
say that working in a
company with a clear
succession plan would
improve their level of
engagement
SOURCE: www.hireology.com/blog/5-stats-on-talent-management-and-succession-planning/

THE COST
OF WRONG
SUCCESSION
PLANNING
03 ///

03 /// The Cost Of Wrong Succession Planning
1 // FINANCIAL RISK
The impact of a sudden departure
or crisis for a key leadership role or
mission critical position is significant
and could cause disruption of the
business. Some impact of business
disruption includes issues such as
suspended initiatives, disrupted third-
party/partner relations, loss of revenue
or shares and so on. There is a lot of
uncertainty and turbulence posed
from a sudden vacancy/departure of
a key position within the organization.
Studies show that companies without
a proper succession plan forgo an
average of $1.8 billion in shareholder
value compared with companies that
succession plan regardless of whether
the replacement is an insider or
outsider. For example, shares in Hewlett
Packard took a 8.3% plunge after the
CEO stepped down in 2010. However
this could be avoided if organizations
have solid and effective succession
planning in place.

2 // THE WRONG CANDIDATE
When there is no structured process or
success profile in place to determine
what good looks like and selection is
based on subjectivity or one-sided
factors, whether hiring from internally
or externally, there is always the risk
of selecting the wrong candidate,
someone who is not fully qualified,
for a role. This happens even more
so when there is an urgency to fill a
vacancy quickly. The lack of a role fit,
be it behaviorally, culturally or skill-
wise, would negatively influence the
effectiveness and performance of
someone in the role. According to the
U.S Department of Labor, the cost
of a wrong hire is at least 30% of the
employee’s first-year earning and this
is an estimate of hard figures. There
is also the element of morale and
productivity of other employees that
could potentially be affected on top of
the quantifiable financial impact.

3 // LOST KNOWLEDGE AND EXPERTISE
When a top talent leaves the
company/role without a successor, the
employee leaves taking with them all
the knowledge and skillsets they have
gained while in the role, in addition to
the relationships built with stakeholders
and how that could be leveraged to
yield business results. For example,
while hiring someone externally may
fill the knowledge gap for the industry,
but they require time to understand
the dynamics and politics of the
organization. The cost to replace a
highly trained employee is expensive
and could exceed 200% of their salary.
Losing skilled employees in highly
niche roles also increases the difficulty
in finding a replacement externally
due to the lack of talents in the market.

4 // LOSING INTERNAL TALENTS
It is significantly cheaper for internal
talents to success a role, as the
organization can save time and
recruitment fees. Furthermore,
internal talents already come with
institutional knowledge, as well as
other relevant data that can be
factored into the decision-making
such as a performance track record,
360 feedback and assessment data.
Promoting/hiring internal talents
as part of career development and
advancement opportunities can
motivate ands retain employees. As
a results, this would strengthen their
engagement and commitment to
the organization, thereby increasing
employee performance and talent
retention. In contrast, organizations
will lose out on these when there is no
succession plan in place as it can be
easy to overlook internal talents who
are highly interested or suitable for a
key positions for external hires instead.

A NEW
LENSES ON
SUCCESSION
PLANNING
04 ///

04 /// A New Lenses On Succession Planning
3 NEW LENSES
As we have seen, keeping certain
areas in traditional succession
planning or even worse getting
succesion planning wrong overall
can have a serious impact
on organisations. Therefore,
organisations need to be constantly
ensuring their succession planning
process is effective and efficient.
There is a fallacy that making
succession planning constant
and at scale however can cost
organizations a lot of money. In
fact, many business leaders and HR
practitioners believe that succession
planning is a complex process and practice
restricted to the largest organizations with
the most sophisticated organizational
development departments.
These, may have been through back in the
day but with the constant evolution of HR
platforms and increasing predictability of
people analytics, succession planning can
now be a scaled process without breaking
the bank. Organizations who want the long
term performance and financial benefits of
having a great succession planning program
must now put a new lens on succession
planning and understand how key areas of
the process are now made better.
There are 3 new lenses
organizations must have on
succession planning moving
forward.
1 // Success Profiles
2 // Measurements & Visualization
3 // Dedicated Platform

1 // SUCCESS PROFILES
The most basic denominator for
succession planning are jobs, not
people. This means that when choosing
a replacement, organizations must
look at person to job fit instead of
person to person comparison. The best
successor would match the leadership
competencies, cultural values, technical
skills and aspirations need for the job.
However, HR sometimes finds this hard
to do objectively because in todays
world jobs evolve and the skills needed
for the job change quickly.
This is where organizations need to
have a job architecture framework
that houses all skills and competencies
needed for each job in a central
depository, simply put - Success
Profiles. A validated depository of
Success Profiles can very quickly give
HR a view into all parameters needed
for what good looks like for a role, and
therefore now giving them visibility into
the best person for the role.

A well designed Success Profile gives visibility into different areas needed to perform at
a role. An example below shows how success profiles break up competencies needed
for a CDO into different areas.
// Communicating for Impact
// Continuous Transformation
// Social Intelligence
// Learning Agility
// Cognitive Ability
// Agile Development
// Artificial Intelligence
// Cybersecurity Risk
Management
// Thrive on Innovation
// Customer Value Creation
// Passion for Excellence
MICHAEL
HENDERSON
LEADERSHIP
AGILITY
FUNCTIONAL/
TECHNICAL
CULTURAL FIT
Chief Digital Officer

INFO DROP
A study at Oxford
found that 45% of all
jobs will disappear in
the next 10 years

2 // MEASUREMENTS & VISUALIZATION
Earlier we understood why performance should not be the only metric taken into
account when making succession planning decisions, and with the introduction
of Success Profiles we can clearly see what else needs to be measured. Next,
organizations should find tools of measurements that provide an objective, fair and
accurate result and also find a way to visualize the output.

MEASUREMENT
VISUALIZATION
Measurement tools will allow
organizations to understand the
performance and potential of an
individual making talent decisions
more holistic. Organizations can
match the tools they need with
HR and business leaders today are
expected to make people decisions
much quicker than before, but
without compromising accuracy.
This is where the power to visualize
data into insights fast becomes
necessary. Manually matching
the relevant competencies in the Success
Profiles. When deciding on measurement
tools, organizations should look into
qualifying criteria’s like predictive validity,
reliability, mobile responsiveness, suitably
across levels, engaging and etc.
your measurement data against success
profiles to find the perfect candidates can
be physically taxing, costly and present the
possibility of human error. Instead, to scale,
organizations must adopt dashboard that
allow them to toggle filters they need and
will visualize the appropriate talents for it.

3 // DEDICATED PLATFORM
Upon having a Success Profile
repository, measuring and visualizing
data, organizations must now make
this process on-going, scalable and
forward looking. Ensuring succession
planning becomes a year round
process at every job level needs a
dedicated platform that culminates
all talent information, guides career
conversations with objective data
present and allows for alignment
between tomorrows talent and
business strategy. This will also allows
organizations to easily understand
different role movements possible
within an organizations and when
exactly external talent is needed.
Organizations must take a new view on
development and succession planning
in that it does not necessarily mean
an upward promotion but also lateral
moves and aspired moves. Many
talents leave organizations because
of stagnancy due to not having
an upward position available, but
organizations who recognize this early
are able to design different moves to
retain their talent.
Creating the ability to move people in
multiple ways via objective data based
on validated Success Profiles not only
increases an organizations succession
plan readiness but helps grow internal
mobility and talent management
all contributing to high employee
retention. More and more research
shows that holding multiple lateral
roles in an organization contributes
to high performance upon promotion.
As well as that, research shows that a
third axis aside from performance and
potential, which is aspiration actually
contribute to high performance.
Having a platform to help manage this
is what organizations need today.

05 /// Conclusion
Succession planning ensures
business continuity by making sure
the right people are put in the right
positions to drive the company.
Organizations who have ignored this
or got succession planning wrong
have paid hefty prices such as drop
in shareholder value, year on year
losses and even acquisitions. Take
a new lens on succession planning
to ensure your organization thrives
through change of roles and people.
Here are some places to start with
if your organizations does not
currently have a succession plan in
place.
Start small and build: Rolling out an
organization wide practice can be daunting,
instead identify key revenue driving
departments and start there leading into
scale.
Make it an organization objective: Create
transparency and buy in by making
succession planning an organizational goal
not a HR program.
Data, data, data: Remember to make all
talent decisions objectively by having talent
conversations driven by data.

FIND OUT HOW OUR FLAGSHIP
STRATEGIC TALENT MANAGEMENT
PLATFORM, TALENTPULSE, IS
HELPING ORGANIZATIONS MAKE
THEIR SUCCESSION PLANNING MORE
POWERFUL, OBJECTIVE AND SCALABLE
www.accendotechnologies.com
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A New Lens On Succession Planning

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