Outmoded processes and a reluctance from young people to step up to leadership roles may impact future business sustainability
The pace of business in 2017 means that longer term strategic planning can often be jettisoned and replaced with short-term reaction-based planning, which ultimately doesn’t do anyone any favours. One area that should never fall victim to this ‘short-termism’ is succession planning. However, headlines from around the world indicate that this is something large corporates continue to fail on.
Research from DDI* in 2016, indicates that only 15% of HR professionals in the 2,000-plus organisations surveyed rate their future bench strength as strong. Just as worrying, for less than half of the critical positions in those organisations, there are no internal candidates ready and waiting in the wings.
Olivier Pestel, Cornerstone OnDemand’s Head of Presales & Business Development Asia Pacific & Japan, regularly hears from client organisations that they are falling short of effectively developing efficient succession strategies, with too few or no candidates in the pipeline.
He adds that there are two key reasons for this lack of preparation: outmoded systems and processes, including the technology and data insights that are required in today’s rapidly changing world; and a growing indifference from younger workers that the management path is one they want to tread.
“Technology evolves so fast that many employers might be losing some of the value that comes from connecting data – and succession planning in a siloed environment isn’t very effective,” Pestel says. “It’s vital to have technology that supports the entire organisation in these talent management tasks.”
As for the growing indifference to eventually moving into management and leadership roles, Pestel cites Arthur C. Brooks, a columnist with The New York Times, who wrote: “Why don’t people stop rising when they’re happy?... We incorrectly infer that promotions will equal greater satisfaction.”
Indeed, a CareerBuilder survey from 2014 found that a mere 34% of workers aspire to leadership positions. Why? The majority (52%) are simply satisfied in their current positions. What’s more, many people who are already in management positions would rather be doing something else. With that in mind, organisations are starting to realise that rising up the ladder is not always the Holy Grail and there are many ways people can remain influential individual contributors and continue to hone their expertise. For example, they can act as one-on-one mentors, they can offer training to new employees, they can lead internal committees or they can become ‘fellows’ within the company dedicated to researching their respective fields.
Clearly it’s time to reconsider what succession means and how it can once again be factored into long-term talent management.
Pestel says there’s more to succession planning than identifying the next wave of senior managers or VPs. While it’s important to groom future leaders for your company, a singular focus on finding ‘leadership’ often comes at the cost of missing talent for lower-level positions.
“When this happens, your succession planning strategy can feel a lot like musical chairs,” he says. “Instead of creating ‘holes’ throughout the bottom of an organisation and hoping for the best, HR professionals need to think holistically about the talent lifecycle.”
He adds that when succession, development and recruiting are in sync, it’s possible to proactively fill those holes.
There is an obvious strong link between succession planning and talent mapping – the latter of which could be described as the process of linking the skills inventory with short-term to long-term headcount planning, managing the balance between an organisation’s existing supply of high-performance and high-potential talent, and the need for different skills and qualities as the business changes. As such, talent mapping is an important part of succession planning as well as workforce planning.
WHY IS SUCCESSION A PRIORITY?
DDI’s white paper, Taking Your Succession Management Plan into the 21st Century, identified five key reasons why succession management should be on top of the strategic agenda:
• An exodus of baby boomers in many countries is creating a shortage of experienced leaders. As a result, millennials – with different expectations and views on leadership – will be filling open slots from the C-suite on down.
• Upwards of half of the global workforce remains disengaged year after year. High-quality leadership plays a key role in employee engagement. When leaders don’t have the skills to engage their workforces, business productivity and talent retention
• Most companies are facing some form of digital disruption, requiring a new set of competencies such as 360-degree thinking and hyper-collaboration.
• Leadership is very much becoming a global value proposition. Organisations must fi nd, develop and nurture leaders who can work across cultural boundaries and manage multiple operations in different countries.
• Inclusiveness is becoming a leadership issue for more than social/cultural reasons. DDI’s research shows that higher performing companies have double the number of females in leadership versus their lower performing counterparts
Doing it better
Knowing who to move where and when is a key part of succession planning but talent mobility also plays a key role in helping organisations stay agile.
“When we talk about agility we talk about how your organisation can react to changes in the marketplace, recognise and close employee skill gaps, and align the right people in the right places to handle any pivots in business strategy,” says Pestel.
He adds that the increasingly popular ‘career lattice’ – with its sideways moves and tangential project work – is enabling that agility in the workplace. Pestel says there are three essential elements required to ensure succession works in 2017.
- A common competency language. “This simply means that an employee can carry his or her competencies around with them, from job to job, from organisation to organisation, even from country to country. It becomes like an identity card and people can continue to develop those competencies along a structured path in different businesses throughout their career. For the employees it means ensuring that the skill or competency they’re developing today will have a mid-to long-term impact on whatever jobs they will do in the future.”
- Individualised employee development. “HR technology is no longer designed for HR people; the primary consumer is the manager and the employee. They are the consumer of all these applications. It’s no longer designed for the back-office, but rather for employees so they can master it and own their personal development.”
- The promotion of an internal job marketplace. “The open job marketplace is about providing some transparency and making it easier for someone to land a job at your company. It’s about trying to break down that mindset of keeping people within your team. That takes a lot of change – managers tend to keep their good people with them and it can be a painful process to replace good people. But there comes a point where allowing people to move internally with transparency pays off and benefits individuals and employers.”
HR professionals and people managers may feel slightly overwhelmed by the task at hand. From recruitment to L&D and performance management, and onto wider organisational design, there is much to consider when it comes to succession planning. The rise of big data and prescriptive analytics has also exponentially increased the amount of team and individual data available to managers and their HR business partners.
Technology can assist in keeping everything on track. Just as important is having the right service provider offering advice and solutions.
Cornerstone, for example, has built a solution to give real-time visibility into the employee ‘pedigree’ – in terms of competencies, aspirations, performance and potential, to manage talent reviews, to tie it to the typical succession metrics (impact and risk) – to explore internal and external talent pools and develop individual and job-specific plans for both short-term and long-term horizons.
Indeed, big data and prescriptive analytics can actually provide great assistance to simulate and anticipate the evolution of the potential and the performance of the employees based on their path to development and many other variables.
Cornerstone has a data scientist team that hypothesises and tests predictions on a large set of data to see if the predictors have valuable insight into that data. Once the team has verified that there is predictive power in the data, the company creates models out of them to generate new insights.
Cornerstone cross-validates its models frequently, and thanks to machine learning, models get smarter over time.
“We have literally billions of records,” says Pestel. “Our data scientists will run algorithms on this data in order to find correlations across different disciplines – so recruitment, onboarding, learning, performance. An example might a correlation between hiring someone with these behaviours and competencies having a better performance rating over time in customer service. By crunching all this data we identify correlation. Once that’s identified, we can provide a list of actions – because we know these actions will have an impact.”
Using that example of wanting better customer service, the action might be to hire them from a particular school curriculum and to put them through a particular induction program.
“It’s not just a static model, it’s a dynamic model, but the data we collect over time will continue to validate whether that model is correct over time,” says Pestel.
TIME FOR A RETHINK
A recent Manpower
Group survey^ found that only six percent of millennials want to be leaders, and just four percent want to manage others. When millennials are told about the great growth potential and amazing things leadership can do for their career, many feel they are unprepared for these positions. In fact, 63% of millennials surveyed by Deloitte^^ said their leadership skills aren’t being fully developed. Olivier Pestel of Cornerstone
OnDemand says it’s time for a rethink of how succession is handled and communicated to young future leaders. “Managers are often shocked at these statistics – they assume people want to go higher, to a bigger title and usually bigger pay. However, our motto is ‘realise your potential,’ and there are numerous ways to do that. It’s time to get creative with how people are developed within organisations.”
*Global Leadership Forecast 2014/2015, DDI
^‘Millennials: A Career For Me’, ManpowerGroup
^^Deloitte Millennial Survey
One piece of a bigger puzzle
Pestel adds that succession is just one piece in Cornerstone’s talent management suite, as it should be in any organisation’s talent management strategy.
“Inherent within the development lifecycle of an employee, succession strategies should be managed alongside career planning, performance management and development,” he says. “The dependency of these programs on each other reflects the need for a solution that unifies all this critical talent data in one place. It’s based on this premise that Cornerstone’s succession management solution has been designed to manage your talent for the future.”
Cornerstone OnDemand is pioneering solutions to help organisations realise the potential of a modern workforce. As a global leader in cloud-based learning and human capital management software, Cornerstone is designed to enable a lifetime of learning and development that is fundamental to the growth of employees and organisations. www.cornerstoneondemand.com.au/