Editing Succession planning (section)

==Business succession planning==
Effective succession or talent-pool [[management]] concerns itself with building a series of feeder groups up and down the entire leadership pipeline or progression.<ref name="charan">{{cite book|last1=Charan|first1=Ram|url=https://books.google.com/books?id=kEE3gCkopWYC|title=The Leadership Pipeline: How to Build the Leadership-Powered Company|last2=Drotter|first2=Stephen|last3=Noel|first3=James|date=2001|publisher=John Wiley & Sons|isbn=0787958522|accessdate=1 October 2017}}</ref>  In contrast, replacement planning is focused narrowly on identifying specific back-up candidates for given [[senior management]] positions. Thought should be given to the [[Employee retention|retention]] of key employees, and the consequences that the departure of key employees may have on the business.<ref>{{cite journal|last1=Cosack|first1=Sabine|last2=Guthridge|first2=Matthew|last3=Lawson|first3=Emily|date=August 2010|title=Retaining key employees in times of change|url=https://www.mckinsey.com/business-functions/organization/our-insights/retaining-key-employees-in-times-of-change|journal=McKinsey Quarterly|accessdate=1 October 2017}}</ref>

The practice of business succession planning is conducted either by organisations themselves, or with the support of specialist [[Management consulting]] firms.

Fundamental to the succession-management process is an underlying philosophy that argues that top talent in the corporation must be managed for the greater good of the enterprise.  [[Merck & Co.|Merck]] and other companies argue that a "talent mindset" must be part of the leadership culture for these practices to be effective.<ref>{{cite book|last1=Michaels|first1=Ed|url=https://archive.org/details/isbn_9781578514595|title=The War for Talent|last2=Handfield-Jones|first2=Helen|last3=Axelrod|first3=Beth|date=2001|publisher=Harvard Business Press|isbn=1578514592|page=[https://archive.org/details/isbn_9781578514595/page/168 168]|url-access=registration|accessdate=1 October 2017}}</ref>

Organizations use succession planning as a process to ensure that employees are [[Recruitment|recruited]] and developed to fill each key role within the company. Through one's succession-planning process, one recruits superior employees,{{cn|date=December 2017}} develops their knowledge, skills, and abilities, and prepares them for advancement or promotion into ever more-challenging roles.
Actively pursuing succession planning ensures that employees are constantly [[Employee development|developed]] to fill each needed role. As one's organization expands, loses key employees, provides promotional opportunities, or increases sales, one's succession planning aims to ensure that one has employees on hand ready and waiting to fill new roles. Succession planning is one of important processes in leadership pipeline.

According to a 2006 [[Canadian Federation of Independent Business]] survey,<ref>{{cite web|last1= Bruce|first1= Doug|title= SME Succession: Update|url= http://www.equicapita.com/wp-content/uploads/2014/04/CFIB-succession-2006-10.pdf|publisher= Canadian Federation of Independent Business|accessdate= 1 October 2017|date= October 2006}}</ref> slightly more than one third of owners of [[Independent business|independent businesses]] plan to exit their business within the next 5 years - and within the next 10 years two-thirds of owners plan to exit their business. The survey also found that [[Small and medium-sized enterprises]] (SMEs) are not adequately prepared for their business succession: only 10% of owners have a formal, written succession plan; 38% have an informal, unwritten plan; and the remaining 52% do not have any succession plan at all. A 2004 [[Canadian Imperial Bank of Commerce|CIBC]] survey suggests that succession planning is increasingly becoming a critical issue. The CIBC estimated that by 2010, $1.2 trillion in business assets would be poised to change hands.<ref>{{cite web|title= Are Canadian Entrepreneurs Ready For Retirement?|url= http://www.equicapita.com/wp-content/uploads/2014/04/retirement-05-en.pdf|publisher= CIBC World Markets Inc.|accessdate= 1 October 2017|date= 2005}}</ref>

Research indicates many succession-planning initiatives fall short of their intent.<ref>{{cite book|title= Workforce Turnover and Firm Performance|date= 1998|publisher= Corporate Leadership Council, Corporate Advisory Board|url= https://books.google.com/books?id=g3-1PgAACAAJ}}</ref> "Bench strength", as it is commonly called, remains a stubborn problem in many if not most companies. Studies indicate that companies that report the greatest gains from succession planning feature high ownership by the CEO and high degrees of engagement among the larger [[leadership]] team.<ref name="kesler">{{cite journal|last1= Kesler|first1= Gregory C.|title= Why the leadership bench never gets deeper: Ten insights about executive talent development|journal= HR Planning Society Journal|date= 2002|volume= 25|issue= 1|pages= 32–44|citeseerx= 10.1.1.461.6090}}</ref>

Companies well known for their succession planning and executive-talent development practices include: [[GE|General Electric]], [[Honeywell]], [[IBM]], [[Marriott International|Marriott]], [[Microsoft]], [[Pepsi]] and [[Procter & Gamble]].

Research indicates that clear objectives are critical to establishing effective succession planning.<ref name="kesler"/> These objectives tend to be core to many or most companies that have well-established practices:
* Identify those with the potential to assume greater responsibility in the organization
* Provide critical development experiences to those that can move into key roles
* Engage the leadership in supporting the development of high-potential leaders
* Build a database that can be used to make better staffing decisions for key jobs

In other companies these additional objectives may be embedded in the succession process:
* Improve employee commitment and retention
* Meet the career development expectations of existing employees
* Counter the increasing difficulty and costs of recruiting employees externally

===Process and practices===
Companies devise elaborate models to characterize their succession and development practices.  Most reflect a cyclical series of activities that include these fundamentals:
* Identify key roles for succession or replacement planning
* Define the competencies and motivational profile required to undertake those roles
* Assess people against these criteria - with a future orientation
* Identify [[Talent pool|pools of talent]] that could potentially fill and perform highly in key roles
* Develop employees to be ready for advancement into key roles - primarily through the right set of experiences.

In many companies, over the past several years,{{when?|date=December 2017}} the emphasis has shifted from planning job assignments to development, with much greater focus on managing key experiences that are critical to growing global-business leaders.{{cn|date=December 2017}}  North American companies tend to be more active in this regard, followed by European and Latin American countries.

[[PepsiCo]], IBM and [[Nike, Inc.|Nike]] provide current examples of the so-called "game-planning" approach to succession and [[talent management]].  In these and other companies annual reviews are supplemented with an ongoing series of discussions among senior leaders about who is ready to assume larger roles.  Vacancies are anticipated and slates of names are prepared based on highest potential and readiness for job moves.  Organization realignments are viewed as critical windows-of-opportunity to utilize development moves that will serve the greater good of the enterprise.

Assessment is a key practice in effective succession-planning.  There is no widely accepted formula for evaluating the future potential of leaders, but many tools and approaches continue to be used today, ranging from personality and cognitive testing to team-based interviewing and simulations and other [[Assessment centre]] methods. [[Elliott Jaques]] and others have argued for the importance of focusing assessments narrowly on critical differentiators of future performance.  Jaques developed a persuasive case for measuring candidates' ability to manage complexity, formulating a robust operational definition of business intelligence.<ref>{{cite book|last1= Jaques|first1= Elliott|title= Requisite organization: the CEO's guide to creative structure and leadership|date= 1989|publisher= Cason Hall|isbn= 096210700X|url= https://books.google.com/books?id=gkwPAQAAMAAJ|accessdate= 1 October 2017}}</ref> The Cognitive Process Profile (CPP) [[Psychometrics|psychometric]] is an example of a tool used in succession planning to measure candidates' ability to manage complexity according to Jaques' definition.

Companies struggle to find practices that are effective and practical.  It is clear that leaders who rely on instinct and gut to make promotion decisions are often not effective.{{cn|date=December 2017}}  Research indicates that the most valid practices for assessment are those that involve multiple methods and especially multiple raters.<ref>{{cite book|last1= McCall|first1= Morgan W.|title= High flyers: Developing the next generation of leaders|date= 1998|publisher= Harvard Business Press|isbn= 0875843360|url= https://archive.org/details/highflyersdevelo00mcca|url-access= registration|accessdate= 1 October 2017}}</ref>{{qn|date=December 2017}} "Calibration meetings" composed of senior leaders can be quite effective in judging a slate of potential senior leaders with the right tools and facilitation.{{cn|date=December 2017}}

With organisations facing increasing complexity and uncertainty in their operating environments some{{quantify|date=December 2017}} suggest a move away from competence-based approaches.<ref>{{cite journal|last1= Carroll|first1= B.|last2= Levy|first2= L.|last3= Richmond|first3= D.|title= Leadership as practice: Challenging the competency paradigm|journal= Leadership|date= 2008|volume= 4|issue= 4|pages= 363–379|doi= 10.1177/1742715008095186|s2cid= 145608797}}</ref> In a future that is increasingly hard to predict leaders will need to see opportunity in volatility, spot patterns in complexity, find creative solutions to problems, keep in mind long-term strategic goals for the organisation and wider society, and hold onto uncertainty until the optimum time to make a decision.{{cn|date=December 2017}}

Professionals in the field, including academics, consultants and corporate practitioners, have many strongly-held views on the topic.  Best practice is a slippery concept in this field.  There are many thought-pieces on the subject that readers may{{or|date=December 2017}} find valuable, such as "Debunking 10 Top Talent Management Myths", ''Talent Management Magazine'', Doris Sims, December 2009. Research-based writing is more difficult to find.  The Corporate Leadership Council, The Best Practice Institute (BPI) and the Center for Creative Leadership, as well as the Human Resources Planning Society, are sources of some effective research-based materials.

Over the years,{{when?|date=December 2017}} organizations have changed their approach to succession planning.  What used to be a rigid, confidential process of hand-picking executives to be company successors is now becoming a more fluid, transparent practice that identifies high-potential leaders and incorporates development programs preparing them for top positions.<ref name="downs">{{cite web|last1= Downs|first1= Lisa J.|title= Integrated Talent Management: Building a Strategy One Block at a Time|url= https://www.td.org/Publications/Magazines/TD/TD-Archive/2012/08/Integrated-Talent-Management|website= Association for Talent Development|accessdate= 1 October 2017|date= 8 August 2012}}</ref> {{As of | 2017}} corporations consider succession planning a part of a holistic strategy called "talent management".{{cn|date=December 2017}}  According to the company PEMCO, "talent management is defined as the activities and processes throughout the employee life cycle:  recruiting and hiring, [[Onboarding]], training, professional development, performance management, [[workforce planning]], leadership development, career development, cross-functional work assignments, succession planning, and the employee exit process".<ref name="downs"/> When managing internal talent, companies must "know whether the right people, are moving at the right pace into the right jobs at the right time".<ref>{{cite journal|last1= Conge|first1= Jay A.|last2= Fulmer|first2= Robert M.|title= Developing Your Leadership Pipeline|journal= Harvard Business Journal|date= December 2003}}</ref> An effective succession-planning strategy, coupled with solid career-development programs, will help paint a more promising future for employees.{{cn|date=December 2017}}

===Succession management===
A substantial body of literature discusses succession planning.  The first book that addressed the topic fully was "Executive Continuity" by Walter Mahler.  Mahler was responsible in the 1970s for helping to shape the General Electric succession process which became the gold standard of corporate practice.  Mahler, who was heavily influenced by [[Peter Drucker]], wrote three other books on the subject of succession, all of which are out of print.  His colleagues, Steve Drotter and Greg Kesler,<ref name="kesler"/> as well as others, expanded on Mahler's work in their writings.  "The Leadership Pipeline: How to Build the Leadership Powered Company", by Charan, Drotter and Noel is noteworthy.<ref name="charan"/>{{qn|date=December 2017}} A new edited collection of materials, edited by Marshall Goldsmith, describes many contemporary examples in large companies.<ref>{{cite book|last1= Goldsmith|first1= Marshall|last2= Carter|first2= Louis|title= Best Practices in Talent Management: How the World's Leading Corporations Manage, Develop, and Retain Top Talent|date= 9 December 2009|publisher= John Wiley & Sons|isbn= 978-0470555231|url= https://books.google.com/books?id=60mwb8TWBgYC|accessdate= 1 October 2017}}</ref>

Most large corporations assign a process owner for talent and succession management.  Resourcing of the work varies widely - from numbers of highly dedicated internal consultants to limited professional support embedded in the roles of [[Human resource management|human-resources]] generalists.  Often these staff resources are separate from external staffing or recruiting functions. {{As of|2017}} some companies seek to integrate internal and external staffing.  Others are more inclined to integrate succession management with the performance management process in order simplify the work for line managers.

===Succession advisors===
A prior preparation needs to be done for the replacement of a [[CEO]] in family firms.{{cn|date=December 2017}} The role of advisors is important as they help with the transition of leadership between the current-generation leaders and the successors.{{cn|date=December 2017}} Advisors help family-owned businesses establish their own leadership skills. This process is relatively long if the successors want to be accepted by all employees. They need to take higher managing positions gradually to be respected. During this process, the successors are asked to develop different skills such as leadership. This is where the role of advisors fully exemplifies its importance. It is when the managing position is shared between the first-generation leader, the second and the advisors. An advisor helps with communication because emotional factors between family members can badly affect the company. The advisors help manage everything during a predetermined period of time and make the succession process less painful and eventful for everybody.  In these cases, an interim leadership is usually what is best for the company. The employees can get accustomed to changes while getting to know the future CEO.<ref>{{cite journal|last1= Salvato|first1= Carlo|last2= Corbetta|first2= Guido|title= Transitional Leadership of Advisors as a Facilitator of successors' Leadership construction|journal= Family Business Review|volume= 26|issue= 3|pages= 235–255|doi= 10.1177/0894486513490796|year= 2013|s2cid= 154708499}}
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