Succession planning plays a key role in developing future leaders in any organisation, however many still struggle to identify and develop those potential leaders. Craig Donaldson looks at how two organisations approach the succession planning process, exposes the associated pitfalls and examines future trends in the area
Succession planning plays a key role in developing future leaders in any organisation, however many still struggle to identify and develop those potential leaders. Craig Donaldson looks at how two organisations approach the succession planning process, exposes the associated pitfalls and examines future trends in the area
National Foods
National Foods is one of Australia’s largest food companies, with core activities in milk, fresh dairy foods and specialty cheeses. Formed in 1991 after the amalgamation of several dairy and food-related businesses, its annual turnover today exceeds $1 billion.
The company has made a concerted effort to improve not just succession planning, but broader organisational development over the past 12 to 18 months, according to David Clark, group executive human resources for National Foods. “What we’ve embarked on is a very strong focus on leadership development within the business to start off with. Our definition of leadership is not just the CEO and executive team – we look at leaders at all levels right down to first line supervisors,” he explains. “What we’re trying to do is help people understand that in order for the organisation to move forward it has to be driven at all levels. You can’t just have people at the top trying to pull it along, you’ve got to have people working at all levels and it’s the leadership capability throughout the organisation that is going to do it.”
As such, National Foods has established a series of leadership development processes for executive general managers, down through to middle managers and supervisors. “We’re putting a lot of effort into the communication of the business strategy, so the leadership teams are accountable for making sure that strategy is communicated throughout, making sure that our vision and values are communicated throughout and how they will be part of our business going forward,” Clark says. “This ensures that we get a strong alignment from our strategy through business plans into individual objectives.”
In the process, National Foods’ performance management has been re-engineered as a key facilitating tool for achieving alignment from strategy through to individual objectives, so employees and managers have a sense of where their individual contribution fits into the whole and they can measure their achievements.
In terms of succession planning, National Foods’ strategic plan for next three to five years feeds directly into the process. This aligns all developmental processes, from performance management to individual objectives, ensuring support for competencies and skills required for the future, Clark says. While National Foods does have replacement plans at the top level as its board needs to know who might be lined up to backfill executive roles if the need arises, he says succession planning focuses on developing a talent pool within the organisation, based on needs arising from its strategic plan.
“So out strategic plan will look at all sorts of things in terms of how the business is going to grow. Part of that growth will determine the areas where we need to boost particular competencies and skills and the type of people we’re going to need. This enables us to examine where we need to give people opportunities to stretch and develop in terms of the direction our plan is going to take.”
This approach enables National Foods to set the standard for what’s required of future leaders, rather than coming up with a laundry list of standard competencies. Clark says the key to this is in understanding what differentiates superior from good or average performance, which usually comes down to a relatively small number of behavioural rather than technical competencies. “Just focusing on the technical requirements of a role won’t get you ahead – it’s really the behavioural competencies that will make the difference.”
Clark also believes organisations can become insular in their thinking with regards to competencies required for certain roles. In addition to looking at the strategic skills needs of National Foods, Clark also compares competencies against external benchmarks to gain a broader perspective. “There’s lots of studies globally on competencies and how they impact organisations, for example. There’s a lot of good research-based work out there and it makes sense to tap into that.”
Clark concludes that there’s no magic answer to successful succession planning, but simply puts it down to good discipline, consistency and transparency of processes. “Be open with employees about performance issues and where they can and can’t go – just stick with those core things, get the processes in place and work them hard,” he says.
The Australian Public Service Commission
The Australian Public Service Commission (APSC) plays a central role in both quality assurance and contributing to the future capability and sustainability of the Australian Public Service (APS). With about 150 staff nationally, the APSC focuses on promoting good practice in managing people, supporting leadership as well as learning and development in the APS.
The APSC has carried out extensive work on an integrated leadership strategy for the APS, according to Julie Smith, group manager of Organisational Performance and Values for the APSC. In particular, its Senior Executive Leadership Capability (SELC) Framework sets out the key skills, knowledge and competencies for leadership in the APS. The framework identifies five core criteria for high performance by APS leaders: the ability to shape strategic thinking; achievement of results; cultivation of productive working relationships; personal drive and integrity; and the ability to communicate influentially.
Each of these criteria has been unpacked into groups of interrelated capabilities, Smith says, which describe the behaviour for APS leadership from an EL1 level (the base level of APS management) through to SES Band 3 level (the most senior executive APS level). The framework has many potential applications including selection, leadership development, performance management and short and long-term planning for the senior executive service.
“Each government agency handles its workforce planning slightly differently, depending on the particular issues facing them,” Smith explains. “We envisage that agency-specific criteria will be added to the SELC framework to meet their own requirements down the track. This could include building performance management systems or learning and leadership programs, which we’re currently refreshing to align with the integrated leadership strategy.”
In regards to leadership and succession planning within the APSC itself, Smith says the strategy is very much about growing its own and building the capability of the commission’s workforce. “The way in which we deal with succession management is that we don’t target individuals – that wouldn’t necessarily be consistent with the Government’s merit principles. Rather what we do is build capability or be skilled in bench-strengths, which is about building the capability of groups of people who can then collectively compete on merit for promotion. So succession management in the public service isn’t necessarily about identifying an individual who might be a future leader – it’s more about identifying where the gaps are and then addressing those collectively.”
One of the particular challenges the APSC and wider public service faces in this area is retaining younger employees who would make suitable career candidates, according to Smith. Many younger workers tend to leave after about five years of service for a variety of reasons, from career expectations and opportunities, through to reward and remuneration potential.
“In the past young people joined the public service because they saw it as a career for life, but there isn’t that expectation anymore. They come in, build their capability, then go off and work in the private sector for a while,” she says. If they’re able to secure a place in a government graduate program, particularly foreign affairs or treasury, younger employees are able to build better levels of capability than they would in the private sector because of the learning and development opportunities at this level of the service, she says.
While younger employees do have a tendency to leave the public service, Smith says they often come back after spending a number of years in the private sector. “The people who stay are the ones who tend to be committed public servants with public administration principles. That’s where their passion and commitment is, rather than a big salary and earning a lot of money.”
Younger employees often believe that good performance is recognised through promotion and expect to climb the career ladder fairly quickly. However this expectation can’t always be readily accommodated due to the flat management structure of the public service, she explains. As a result, the APSC has introduced alternative performance recognition initiatives such as bonuses and opportunities for involvement in interdepartmental committees or taskforces.
The APSC conducted some research last year to examine how far the public service had progressed in relation to workforce planning and succession management, and Smith says there is still work to be done. “We all appreciate that we’re about to face a serious contraction in the labour market, so we’re looking at a variety of ways of retaining younger employees after the five-year barrier, building their capability and bench-strength and developing the capability of leaders in the public service.”
