Chapter 7-Succession Mgmt

Chapter 7-Succession Mgmt - Chapter 7 Succession Management...

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Chapter 7: Succession Management Importance of Succession Management Succession Management: systematic process of determining critical roles within the organization, identifying and evaluating possible successors and developing them for these roles. Must be a pipeline of talent for the most critical roles: CEO Senior management team (executives) Critical roles based on long-term value to the organization (such as scientists or customer relationship specialists) Goal of succession planning: identify and prepare future leaders and to ensure business continuity Plan for expected and unexpected turnover Research shows delays in naming successor results in decreasing operating performance -> effects can last up to 2 years Needed even when retirements and company sellouts are predictable Because of baby boomers à 20% of top mgmt. and 25% of middle mgmt. positions will become vacant in future, retirements of baby boomers will accelerate this trend Evolution of Succession Management Replacement planning: process of identifying short-term and long-term emergency backups to fill critical positions How management planning has evolved into succession management: 1. Broader focus Focus of replacement planning was the job and having replacement if the incumbent died This concept for the succession and replacement charts for the high-level and key positions in the org o Consisted of a periodically updated table on employees who might be nominated if a need arose o Focused on high-potential candidates 2. Time horizon Short-term planning does not allow for the intake or career management of those with different skills in growth areas Succession mgmt. looks at a longer term and focuses on future of 2 years or more 3. Talent pools Develop several multiple successors for every positions starting with positions that are harder to fill
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Communicate to star employees that they have potential 4. Rating system: traditionally relied on rating on single evaluator, now it’s a 360degree rating system Internal versus External
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