Sunday, April 25, 2010

Succession Planning & HR Strategy

Many organisations take their most vital resource for granted – their Human Resource. Not enough attention is given to this essential resource and organisations often fail to link human resources to corporate strategy. An effective human resource strategy will align itself with the corporate strategy; and be a core contributor to ensuring continuous improvement and sustainable growth.

In a 2008 survey by Ernest & Young, executives from 150 Fortune 1000 companies agreed that human resource issues ranked among the top five business issues impacting on an organisations performance and their results. Yet, staggeringly, 41% of executives surveyed admitted to only reviewing these human resource related risks on, at best, an ad hoc basis and in some cases not at all, (Steffee, S, 2008, p.14)

The survey identified the top five human resource ‘risk’ areas that have a significant impact on organisational performance as being;

Talent Management and Succession Planning
Regulatory Compliance
Pay and Performance Alignment
Employee Training and Development

One of the key principles of human resource development (and organisational performance) is succession planning – this key business component, if utilised correctly, can add significant value to an organisations future growth and can be a significant competitive advantage – but only if implemented correctly. Unfortunately, as with many business principles, it isn’t succession planning that has failed organisations, but organisations that have failed to understand and implement succession planning correctly.

Gaffney (2005) highlights two key points, firstly that career development and succession planning go hand in hand; and secondly, that a synergy between career development and succession planning helps create happier and more productive employees, (p.7).

Matching career aspirations with succession requirements is the ultimate goal for any employee and their organisation – but it has to be developed and managed properly from the outset. Organisations need to have an open and honest culture and employees need to be fully aware of their strengths and weaknesses and not have unrealistic expectations.

For succession planning to be successful, your organisation will need to have the following in place;

1. A well thought out corporate strategy, implementation plan and corporate vision;

2. A HR strategy and a manpower plan that link directly to the corporate strategy;

3. Communication and transparency, vertically and horizontally; such that the ‘whole’ organisation understands the future strategy; and employees are aware how they contribute to the organisations success, the implications for their current role and their future opportunities;

4. A qualitative and quantitative method for skills and talent management;

5. An effective method for identifying and communicating with all employees about career aspirations and succession opportunities/requirements;

6. Strategic leaders who fully understand the impact the human resource has on organisational performance and who fully support the HR function;

7. A mechanism for regular strategic review and succession feedback;

8. An organisation that is flexible to change; and

9. An organisational culture that embraces best practices and thrives on innovation, at all levels.

Finally it’s worth remembering a quote from Andrew and Valerie Stewart, who remind us that, “the relationship between performance and potential is not a simple one. The best performers are not necessarily those of high potential.
Promotion solely on the basis of past performance inevitably leads to promotion to the person’s level of incompetence.”


Gaffney, S. (2005). Career Development as a Retention and Succession Planning Tool. Journal of Quality & Participation, Vol. 28, Issue 3, p.7-10.

Steffee, S. (2008). HR Risks Are Largely Ignored. Internal Auditor, Vol. 65, Issue 6, p.14-15.

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