Every organisation has pivotal roles – individuals who often make an impact well beyond their pay grade and tenure. These roles are increasingly complex which makes succession harder to plan and replacement an expensive and risky business. In today’s dynamic market, focusing on growing successors is rarely enough. Smart companies are revolutionising the way they track pivotal role ‘ready-now’ talent.
By MARIA LESKE
It happens in most organisations: unexpectedly, a pivotal role becomes vacant and the theoretical risk of losing such an employee is now a harsh reality. Often, there are no immediate successors in place. Indeed, no team member may be even remotely ‘ready’.
"“Best practice in succession risk management means this pipeline is addressed both internally and externally” Worse, the organisation may not be ready to re-hire either. Typically, two thirds of what executives in pivotal roles actually do is not mirrored in their position description. Their technical, market and organisational knowledge is very difficult to replicate. No recent assessment of role requirements has been undertaken, and this is now more difficult since the incumbent has left.
The talent acquisition team are starting from ground zero, missing vital data and insights, but the pressure is on to immediately fill a hugely complex role.
What is at risk?
"Download a primer that helps our clients audit their current succession risk management plans”The situation described above leads to a spike in material risk to the organisation. Two choices are available: to promote from within or hire externally. The data shows that failed promotions and hires can result in exorbitant costs to companies due to significant losses in productivity, impact on morale, negative impressions and disengagement.
The top three risks identified by recent research are:
Of course, it doesn’t have to be like this.
Succession is a material risk: it’s time to treat it like one
Succession Risk Management is the process of continuously identifying and evaluating external and internal leadership talent benchmarked against the company’s specific criteria for success in the role and within its own environment.
Smart companies are now implementing a robust succession risk management solution to ensure they secure the best available talent in these roles. These leadership development programs tend to proactively address a company’s talent challenges now and into the future by building a pipeline pool of ‘ready now’ leaders.
Crucially, best practice in succession risk management means this pipeline is addressed both internally and externally, and focuses on specific roles not just generic levels of leadership.
With several clients, HFL partners with their external talent acquisition providers to implement a best practice, integrated solution that:
The benefits of this proactive approach to effective succession management are significant, and include:
It also creates the conditions for intentional strategic change and mitigates the risk of loss during unexpected crisis or sudden absence of leadership.
In addition, all the talent and intelligence data generated through succession risk management programs can be integrated into a range of talent centric activities such as ongoing succession planning, leadership risk mitigation, talent and capability development and enterprise wide workforce planning.
HFL has produced a short primer that helps our clients audit their current succession risk management plans. The primer also describers our five step process of implementing a succession risk management plan for a pivotal role.
Note: research references upon request.