Identifying talent and managing succession are two of the most critical human resource management processes within any organization. For organizations to be able to remain competitive in an ever-changing global business landscape and labour market, having an identified group of talented employees who are able to fill key leadership roles is critical.
Succession planning explained
Talent development is a common term used to describe the attraction, identification, and development of people considered to be “high potential.” Succession planning is the process of reviewing key roles and determining the readiness levels of potential candidates – both internal and external – to fill these roles. It is an important process that is a key link between talent acquisition and talent development.
To meet current and long-term objectives – and maintain competitive advantage – organizations need to win the battle for top talent. Succession planning is a key factor in ensuring an organization is able to meet its future needs for talented people.
The leadership pipeline
To maintain success over the long term, organizations need more than a great leader — they also need a great leadership pipeline. The effective management of succession involves building a pipeline of talented employees ready to step into various key job roles throughout an organization. In Building Healthy Leadership Pipelines, The Ivey Academy’s Tony Frost thinks about the leadership pipeline the same way that an energy firm thinks about building pipelines that carry oil to market. “… as with any long-term infrastructure project, building a heathy leadership pipeline requires time, attention — and a significant commitment of financial resources.”
Additionally, an effective leadership pipeline structure frees senior leadership to focus on pressing issues.
“Attention to leadership development ensures that an organization has the right people in the right place today. And this allows existing leadership to better focus on more immediate matters by giving them the peace of mind that comes from knowing the future organization will be in good hands. This is a real benefit, one that many organizational stakeholders (such as directors, shareholders, employees and clients) care about — a lot,” says Frost.
Identifying talent in an organization or “talent spotting”
The first step in creating a leadership pipeline is to identify high potential employees as candidates to fill senior leadership roles. A high potential employee is someone with the ability, motivation, and commitment to rise to — and succeed — in more senior, more critical leadership positions.
High potential employees possess these three critical drivers of performance:
- Ability (aptitude, emotional intelligence, functional skills, and training)
- Motivation (rewards, recognition, influence)
- Commitment (a vested interest in the success of the organization with an intent to stay. aligned with organizational values and mission)
The Ivey Academy’s David Loree stresses the importance of spotting high potential employees as soon as possible in The Art of Early Talent Spotting. “The sooner the next potential leaders in your organization are identified, the more time you will have to develop them in a customized manner that fits the specific needs of your company’s market mission. Also remember that unidentified talent can get quickly frustrated and jump ship to competitors.”
Identifying future leaders early means finding them in their current jobs and roles. While we may know the attributes a high potential employee possesses, the fact is that talent isn’t typically easy to recognize in its early stages, and the challenges in distinguishing potential from performance are significant. In some situations, the key success factors that explain current performance might not only be less relevant for future success, they can sometimes be a detriment to future promotion and success in a leadership role. Since leadership potential isn’t necessarily embedded into many junior roles where it can be easily demonstrated, we need processes and systems to spot the markers of potential that manifest themselves in less obvious ways.
One of the key tools that is used in talent spotting is the talent assessment, or talent review. This process is focused less on current employee performance and is more focused on employee development and potential for the future. Talent reviews often employ the use of a 9-box template, a tool used to plot employee performance against employee potential (such as the ability to learn new skills, build relationships, influence team members, and execute strategy) and provides the reviewer with nine distinct options to categorize each employee.
Why succession planning is important
“The rate of change is not going to slow down anytime soon. If anything, competition in most industries will probably speed up even more in the next few decades.” - John P. Kotter, Author, Leading Change
In today’s global business environment, rapid, radical, and continuous change has become the norm. Leaders are faced with increasingly complex challenges, and there is greater responsibility placed on leaders at the lower levels of an organization. Recruitment and retention of the best talent has never been more important. As Tony Frost says in Building Healthy Leadership Pipelines, “Talented employees who don’t see a commitment to their development will jump ship. And if there is one thing that keeps CEOs awake at night, it is the prospect of losing key people to competitors and not being comfortable with prospective replacements.”
Succession planning and talent development helps to provide continuity in the leadership pipeline and to develop a deeper capacity for leadership and performance. Benefits of a thoughtful succession plan and talent development strategy include:
- A reputation as a progressive leadership development organization, which is appealing to top external talent
- Provides a competitive edge in the recruitment of key millennial and Gen X talent to keep the leadership pipeline full
- Investments in talent development signal a commitment to future leaders, who then show commitment to the organization.
- A tangible succession plan allows existing leadership to better focus on more immediate matters by giving them the peace of mind that comes from knowing the future organization will be in good hands. Succession plans ensure growth will never be interfered with due to a lack of leadership talent.
To ensure succession planning and talent development success, senior managers need to show personal commitment to developing people by investing their own time and effort as well as financial resources. This requires a mindset that looks beyond quarterly results and is focused on the long-term future of the organization instead.
Leadership development and future proofing
Different organizations have different resourcing challenges, draw on different labour markets, and operate on different time frames. As a result, there is no one-size-fits-all talent management solution. There are also situations in which organizations attract quality recruits who may not be labelled “high potential” but can grow naturally into more senior roles when they are provided appropriate learning and development opportunities. The Ivey Leadership Program, named by Financial Times as one of the world’s top ten programs in general management and leadership, is a great way to invest in the development of your own leaders — or yourself.
A key aspect of succession planning is facilitated and tailored learning and development for identified individuals to prepare them for the future. The Ivey Academy’s learning and development (L&D) programs can help you prepare employees for their current roles and develop their capabilities for future responsibilities.
Whether you want to build an effective L&D program from the ground up, or improve your organization’s existing L&D strategy, The Ivey Academy will work with your unique needs, whatever they are. We offer:
- Assessment and analysis of your organization’s specific needs
- Central L&D strategy development that translates learning into organizational performance
- Design of a deliberate organizational culture
- Definition of organizational values
- Design of leadership profiles: the fundamental attributes a leader in your organization must have
- Identification and development of high potential employees using the Nine-Box Matrix tool
- Competency mapping: identifying key competencies employees must have for the organization to succeed
- Assessment solutions to help identify strengths and areas of opportunity for the development of employees
- Succession planning: creating a leadership “bench” to ensure a pool of leadership talent is ready to step up and assume roles when required
- Career development program design methods, including coaching, sponsoring/mentoring, assessments, job rotations, and action learning projects
- Evaluation of L&D initiatives’ impact
For more information on how The Ivey Academy can help your organization identify and build critical capabilities for future success, browse our L&D Advisory and Instructional Design Services.
About The Ivey Academy at Ivey Business School
The Ivey Academy at Ivey Business School is the home for executive Learning and Development (L&D) in Canada. It is Canada’s only full-service L&D house, blending Financial Times top-ranked university-based executive education with talent assessment, instructional design and strategy, and behaviour change sustainment.
Rooted in Ivey Business School’s real-world leadership approach, The Ivey Academy is a place where professionals come to get better, to break old habits and establish new ones, to practice, to change, to obtain coaching and support, and to join a powerful peer network.