Succession planning should be about much more than replacement planning, according to 5 HR professionals we talked to across the country
Bruce Hannah, senior vice-president of human resources strategy and shared services at Algonquin Power & Utilities
The 850-employee company is based in Toronto
At a previous employer, Bruce Hannah came to know an employee who was young and unimposing. Nevertheless, in two years, he became a high-potential employee.
“If you don’t have an identification mechanism to smell those people out, likely you’re going to lose them, because somebody else is going to hire them and tap them on the shoulder,” says Hannah, senior vice-president of human resources strategy and shared services at Algonquin Power & Utilities in Toronto.
Part of the process of succession planning is identifying people who, for example, are the early career leaders at the organization, who are people leaders and technical leaders at the same time, he says.
“You have to have a process for identifying high potentials in the organization so that when you have limited dollars to spend on development, you’re going to spend on the early career leaders and also on those individuals who are your high-potential employees, whether they be high performers or people leaders at the same time.”
That then feeds the performance management system and feeds the leadership and technical training, so HR has “a nice little model” it can take to the board with a readiness assessment org chart that identifies the people who are ready to move in one or two year’s time, or to their next role, says Hannah.
That whole sequence is mapped out so there is a five-year outlook as to what the organization is going to look like and what must be done to keep these employees.
“To have a succession planning program that’s transparent to the employee workforce is really investing in their career and they see that as a huge retention tool,” says Hannah. “If you don’t have it, or you do have it and it’s not transparent, then what’s that doing to your retention? It’s not doing anything. But the sheer fact that you’re spending time and energy and resources to develop these individuals, then, I think, it’s very encouraging for the workforce.”
As for transparency around identifying high potentials, there are differing views.
At a previous company, there was full transparency, with careers all mapped out, says Hannah.
“The downside of that is somebody looking at John and looking at his career map says, ‘Who the hell ever decided this guy was a high-potential employee? He’s a real dunce.’ So you have to make really sure that the people who are up there can be looked up to, they can act as mentors at the same time.”
The other approach is to identify people indirectly and give them more opportunities for cross-functional work, leadership activities or have them attend seminars, for example. That way, if a mistake is made, an employer’s credibility is not at risk, he says.
“I’m a proponent of transparency but I understand why some companies don’t want to do it,” says Hannah. “The downside of that too is once you tell a person he’s a high–potential employee, it gets on their CV pretty fast. The whole intention here is to have a process in place to secure the long-term employment from these individuals who are going to be future leaders of the organization.”
Identifying future leaders starts with a performance review which leads into calibration sessions where teams get together and discuss people in their sphere. These then float up to the level of vice-president and, ultimately, the CEO.
“It doesn’t take a lot of work to get it going. You have to have a CEO who’s dedicated to it, you have to have a board that wants it. When you have a CEO that’s dedicated and really sees the value of this process, then it’s almost intuitive to get it done,” says Hannah. “It doesn’t have to be complex in any way, shape or form.”
But, too often, boards are sitting around the table talking about replacement planning when they discuss succession planning, he says.
“Replacement planning is just a little cog in the wheel of succession planning,” says Hannah. “(Succession planning is) the whole system, from cradle to grave, that takes an employee through the door, and you’re hiring this individual because obviously he’s got talent that he’s going to bring to the table and then, as you develop that person over time, he will evolve through the ranks.”
And many boards of directors don’t insist the CEO come from inside an organization.
“It’s upon the backs of the board of directors to insist succession planning occurs inside an organization and I’m not sure that happens,” he says.
“I must have worked with 10 boards in the past, and it’s always replacement planning until you dedicate two hours of a board meeting to take them through the holistic approach of succession planning and what that looks like and smells like and what it feels like for an organization. It’s incumbent upon the board to get the CEO to do this.”
Part of the problem is also HR, says Hannah. Having interviewed many people for HR roles, he’s heard them speak of succession planning they’ve done where they had two or three candidates for each executive team member. But they aren’t talking about a holistic approach, it’s a systemic approach, he says, and there’s no university course teaching HR professionals about what succession planning is all about and how to put a system in place.
“So shame on us,” he says.
In recent years, another challenge has been around older employees who are delaying retirement.
“That creates a problem in the sense of how do you move your people around the organization to give them exposure?” says Hannah.
At one of Hannah’s previous employers, rotational assignments were used to provide organizational development. But it’s a tough question when it comes to older demographics that are the backbone of the organization. Hannah doesn’t believe a company needs to make room for younger troops coming up the succession line by replacing someone with 25 years of corporate memory with someone who has seven.
“I don’t think that’s a balanced equation at all, so what you do is make sure that you have lateral movement around for people and float them through finance, float them through HR, float them through manufacturing... and have them become generalist engineers that understand the business from every facet and every aspect and then put them in a senior management role leading a significant division or part of the business. But I don’t think it should be at the expense of people who have that corporate knowledge.”
Marcia Buchholz, associate vice-president of HR and CHRO at the University of Calgary
The post-secondary institution has 10,400 employees
The University of Calgary is aiming to become a top research university in the next four years. To deliver on that vision, it’s critical to develop leaders who can meet the challenges ahead, says Marcia Buchholz, associate vice-president of human resources and CHRO at the University of Calgary.
“To this end, we, HR, are focused on developing required leadership competencies that are directly linked to meeting the university’s academic and strategic plan. Our leadership philosophy includes a focus both on transformational leadership and nurturing a leaderful organization,” she says, citing Joe Raelin’s book Creating Leaderful Organizations.
“The leaderful approach supports the notion of leadership coming from anywhere and everywhere on campus — both formal and informal leadership — so our succession programs really need to support the development of these competencies.”
Succession planning is really aligning an organization’s resources against a future vision and organizational goals, says Buchholz.
“Developing leaders within the University of Calgary is a key organizational priority.”
As one of the largest employers in the greater Calgary region, the university has 10,400 employees.
“We have a huge population and incredible talent, so the development of leaders at the university will be really a key success factor in meeting our… vision to sustain our focus on excellence in years ahead,” says Buchholz. “Like most organizations, the generational shift and economy are big influencers on our ability to attract and retain top talent.”
For the succession program to be effective and add value, there needs to be commitment and understanding that the program is woven into the annual business planning process and linked directly to organizational strategy, she says.
“The process requires time for deliberation and calibration, development of individual plans and followup, which can be very time-consuming. Making this commitment is the greatest challenge against a backdrop of other competing priorities.”
Another challenge is the issue of ownership, says Buchholz.
“Many organizations view succession planning as an HR initiative, rather than taking responsibility for succession as being a business imperative. Managers really need to know their employees’ performance track record, career aspirations and potential opportunities to be able to develop and retain key performers for the future.”
While academic leaders at the university have well-established processes in place through tenure and promotions to identify top performers, that’s not the case for non-academics, so the school is starting to develop a formalized succession management program, she says.
In addition, there is a large group of employees who will be looking at retirement over the next few years, so succession planning really helps determine their replacements, says Buchholz.
The school also promotes leadership by offering staff a range of educational and development opportunities to help them enhance their skills and knowledge.
“Human resources has developed and is now piloting new leadership programs focused on developing specific and strategic leadership competencies,” she says.
There is a leadership academy for deans that was piloted last year and will continue this year, along with a leadership academy for department chairs, and courses have been designed for managers to help them design strong teams, learn effective recruitment methods and techniques, and lead others through change, she says.
A new teaching and learning centre also highlights the university’s commitment to the development of teaching excellence and leadership among educators on campus, while a tuition support program allows staff to take up to four academic courses and four continuing education courses for free each year.
Kim Poley, vice-president of HR at K+S Potash Canada in Saskatoon
The 130-employee company is owned by K+S Group based in Kassel, Germany
If you share the belief your employees are the future of your organization, then succession planning really is preparing for the long-term success of the organization, according to Kim Poley, vice-president of human resources at K+S Potash Canada in Saskatoon.
But the biggest problem is employers often lack follow-through, says Poley, who has seen many programs that include great training and performance management systems, followed by HR people checking the boxes and saying, “Did that, did that.”
“But I didn’t see follow-through. I didn’t see the loop get closed in terms of saying, ‘OK, so are we actually seeing some improvement in our leadership and in the development of the next group?’” she says.
“I’ve watched succession planning be this spreadsheet that we fill out once a year and we identify who might be able to fill whose job, and we say which jobs we need to possibly recruit for, because there’s no one we can identify internally, And then we start talking about high potentials and programs and what we need to do to support people to be ready to take the next role. And then not much happens — the follow-through could be better.”
Succession planning is always extremely important, but it’s what a company does for those people in the meantime, what’s done to prepare them, that’s critical, says Poley.
“And I’m not sure that companies actually take that step. I wonder if they go through the motions but it’s not as meaningful as it needs to be. And then (employees) leave because they get an opportunity somewhere else.”
K+S is focused on making sure it has the basics in place with recruitment, says Poley.
“We’re doing a really, really strong job in identifying the characteristics we want in our leaders, making sure all the recruitment tools we’re using identify the people that are the best fit for our organization and culture.”
K+S has also just undertaken a comprehensive leadership development program that has several different components, such as basic supervisory training for people who are brand new supervisors and taking them through assessments, such as Myers-Briggs, to understand what leadership styles they’re using, says Poley.
A few months later, the supervisors will have the opportunity to go to the next level of the program, which is more comprehensive. And then there’s a third component for the management level called “leading leaders.”
“The program is really, really strong but the piece that is for me the most important, that I hope makes the impact on leaders coming up in the organization, is the coaching piece,” she says.
As individuals go through the program, the person facilitating it becomes their coach, “so that we can set up more of an individualized plan for that employee and have actual coaching sessions, so that we can see them actually applying the learning that they have,” says Poley, adding it’s the piece she has not seen at past organizations.
“You’ve got all of these other leaders who are pretty solid, they’re doing a solid job, but they could do so much better if they just had somebody who was guiding them along,” she says. “The leaders are what impact so much our organization, and just how people feel coming to work here every day. So we want to really put our resources there — it’s an important focus.”
K+S is still a very young company, going through its first management cycle now, so it is not yet differentiating when it comes to high potentials, says Poley. And while there will be a focus on top talent, the majority of the people are going to be in that solid category and can’t be forgotten.
“Those solid people, there’s a lot of leaders in that group who want to be great, they just need somebody to help them and show them how to do that.”
Saskatchewan has seen a real shift in becoming a “have” province, and some companies might have become somewhat arrogant or complacent, says Poley.
“They’ve always had situations where it was so simple to recruit for positions, so they didn’t need to really be prepared because there were so many people that were vying to get in the door when we were a have-not province, and now that’s not happening anymore,” she says.
“So, for some companies, it’s a bit of a change of mindset: ‘Oh my God, maybe not everybody does want to come work here, maybe we are in competition.’ And some companies realize that maybe faster than others.”
But if an employee does leave for a better opportunity, it’s a good idea to keep in touch with him and make him know he’s welcome to come back if a suitable position arises, says Poley.
“Succession planning for me is not just looking inside the organization for how you’re going to fill positions in the future, it’s looking at who’s out there in the market you know, who left to take another position that might be ready to come back and take an executive-level position.”
Donna Morris, senior vice-president of HR at Adobe in San Francisco
The digital marketing and media company has more than 11,000 employees worldwide
Succession planning often fails because people consider it an organizational chart assignment, with boxes and names to be filled in, says Donna Morris, senior vice-president of human resources at Adobe in San Francisco.
“That’s extremely dated in people’s views of how companies really evolve and transform and adapt, given the pace of industry and business transformation,” she says.
“The role we have to play in HR is to be visionaries of what we think the capabilities will be in the future and identifying those attributes in people in the present and continuing to build onto that so that they’re really capable to do more in the future.”
Morris, a Canadian who moved to the United States 10 years ago, says she shies away from the term “succession” because it implies the exact same role will be there in the future.
“In a company that’s highly adaptive and transformative, to say that people know today what would be required of a CEO or head of HR or CFO three to five years from now, they wouldn’t be accurate.”
Instead, it’s about identifying individuals with performance potential for increasing levels of responsibility, for whom past performance is the best predictor of the future, she says. And it’s less about succession per se as it is around talent planning.
“I view talent management or talent planning as the activities associated with ensuring that there’s the continuity of skills, capabilities in an organization to enable the succession of a strategy. And the role that we play in human resources... is all around ensuring that we have a sound understanding of the company’s strategy and influence how that strategy should be executed.”
In the past year, Adobe has filled more than 3,000 positions, with 20 per cent done internally, she says.
“We have a very strong focus on internal strength and development. We believe that not only contributes to our success but is a key differentiator in terms of continuing to retain core talent.”
Adobe dismantled its annual review process in 2012 and replaced it with a “check-in” program, says Morris.
“That really is focused on ensuring that our managers are responsible and accountable for setting expectations for all employees they have, for providing ongoing feedback, and ensuring that their employees have growth and development plans.”
To make sure managers are effective, they have access to a collaborative learning program to help them understand their responsibilities around decision-making, setting expectations, delegations, feedback, coaching and the overall strengthening of individual and collective team members.
There are also two programs that select participants, based on performance and potential, who would be Adobe’s leadership bench of the future, says Morris. One focuses on building the business acumen of director-level leaders and increasing their understanding of the company’s strategy. The other is a leadership experience program focused on senior directors and above.
In eliminating the review process, Adobe abandoned formal rankings and instead encouraged managers and leaders to continue to focus on performance and pay for performance but also to identify individuals who demonstrate performance potential and have aspirations for increasing their levels of leadership.
The formal review process was really more of a disrupter to engagement than an enabler, says Morris.
“When we looked at the retention of talent, while it served us well at the highest level of performance, the top 15 per cent… it disenfranchised a very large percentage of our workforce and we really didn’t feel it was consistent with our approach as a company, which is to be very genuine and open with our employees in terms of where they stand real time.”
Adobe credits much of its success to a legacy of innovation, says Morris.
“That ability to continue to transform as a company and innovate requires a workforce that’s very agile, that is adaptable and flexible, and that also requires the rigour of managers and leaders to continue to build capability and evolve individuals to keep up with, frankly, the transformation of the company.”
Sharon Hooper, CHRO at Brandon University in Manitoba
The post-secondary institution has 620 employees
Sharon Hooper has been involved with succession planning programs at several organizations and each one is unique, with different problems, she says.
“The biggest issue, really, for all succession planning is identifying the competencies required for the position and assessing people against those competencies and creating a development program,” says Hooper, CHRO at Brandon University in Manitoba.
While often mixed up with replacement planning, “succession planning is really ensuring we identify high-potential individuals and we develop them so that they are job-ready for future opportunities,” she says.
The idea is to identify people upfront, assess their skills and place them in developmental opportunities so they become successors for eventual vacancies, says Hooper. Replacement planning, on the other hand, is replacing an individual for the short term if a vacancy arises.
Succession planning is important to Brandon University when it comes to the next generation of leaders, says Hooper. On the academic side, it can be more challenging and often involves replacement planning, involving someone who has the administrative capability and is well-respected in his field of study.
On the non-academic side, it’s a little easier in that the school can actually groom people from within, and with many employees approaching retirement, finding high-potential people is “extremely important,” she says.
Like many companies, succession planning at the 620-employee university is not as formalized as it should be, says Hooper.
“We’re looking at the whole notion of succession planning now more than ever.”
Part of it is being able to do competency analysis, so deciding what HR is looking for, what employees it has and then implementing development programs, she says.
“One thing the university does extremely well is putting people into active positions, so that they actually get to test themselves in the role, so doing rotational assignments.”
Hooper is an advocate for telling people they’ve been identified as high potentials. However, she does not believe a person should be told he’s been earmarked for a particular position, because things change over time.
“The important thing for me personally is transparency and letting people know — but it’s how you share the information,” she says.
“Earmarking them and identifying that they are guaranteed a job at that higher level is where I think it breaks down for me.”
Of course, succession planning is challenging because everybody is really busy and confronted with financial constraints, says Hooper.
“Succession planning, while extremely important, it’s always competing with other more urgent matters. So typically, while we have the best intentions, it gets put on the back burner because we have other things to deal with.”
In a perfect world, there would be a couple of positions dedicated for succession planning and HR could rotate people through and develop them in these positions.
“And having vacancies and jobs earmarked for succession is a way to ensure that we can keep the business going, if you will. But that’s the perfect model; the problem, of course, is we’re always competing against limited budgets and resources.”
There can also be issues when it comes to employees in the younger generations who want to be inspired by somebody — and they want it now, says Hooper. They’re not as willing to put in the time that someone in an older generation would have done when he was younger, she says.
“Younger folks (today) are impatient and they really do want to be fast-tracked.”
On the other end of the spectrum, there are many older employees postponing their departure from work, says Hooper.
“On the one hand, that’s terrific because we have the skills and experience that we can retain within the organization. On the other hand, vacancies that otherwise would have gone to younger workers or younger employees are not as available. So is there a trade-off between skill and experience and know-how with the eagerness of somebody younger?”