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Succession planning : A vital part of the industry

Succession planning is defined as the process of choosing a successor in any business which should be taking place only after a well-planned effort. Before looking into the pros and cons of the succession planning and evaluating its effectiveness, one needs to understand why succession planning is important. Let us take the case of Microsoft.

Now, with Bill Gates retiring from the company, he will be succeeded by Steven A. Ballmer as the C.E.O and Ozzie as the Chief Software Architect to look after the company’s affairs. If Bill Gates was an icon, Ballmer too is a master in handling the challenges that he would be facing after his exit. And, the choice of having Ballmer was not sudden or a forced decision, rather a well-thought appointment.

In any organization, the person leading the company either retires after his term completes or he quits owing to some reasons. Someone then has to take place and business has to keep going. It has to be someone capable or equivalent to the predecessor. And this is why a succession planning is important. Succession planning is not just one step at a time but it is an on-going process. It may take days, months and years to have the right person at the right place. It should be an important aspect of every Human Resources department of an organization. Apart from the event of retirement, other incidents can also happen. Like an employee moving to another position within the same company which again needs succession planning. Now, What goes into the planning of a successor? An employee at a key post is mentored, trained intensively and often sent on a job-rotation so that he is experienced enough to take the vacant position.

Performance- Appraisal comes into the picture where each employee is evaluated by the HR department once, twice or thrice in a year. After the exit or death of a key person taking care of the business, three options can be possible.

Maintenance of the business: The business can be preserved by the heirs of the predecessor, but it needs to be seen whether they have the requisite qualification and skills to lead the company.

Sale/Transfer of the business share: The stake holder’s share can be transferred to the other shareholders or can be sold to an outsider. But, succession planning prevents you from selling or transferring the shares or even choosing the wrong person and prompts you to take the right decision only after a good planning. But, succession planning is applicable not only to the key post but also the middle-level and senior-level employees.

How effective?

1. Most of the succession plans that take place are not implemented. The results from various organizations in the past have shown that it is due to the bad execution that succession planning is not helpful.

2. Getting a good replacement is necessary otherwise the whole exercise of succession planning is rendered futile.

3. Succession planning should match up with the business strategies chalked out.

4. The mentoring and training during the succession planning requires a team effort. One of the best examples where succession planning has assumed a good role is Wipro Technologies.

5. Succession planning also helps develop skills with in the organization, instills leadership qualities in the employees and of course the continuity of smooth business operation.

6. One negative aspect of succession planning is talent and brain drain. Once the employees are trained and equipped, they have a tendency to join a new company.

7. With the training, a cost-factor is involved. It may lead to huge budgets sometimes which will be difficult to cope up with.

8. When choosing a successor, company may have to shell out some extra money to find the right person and to fend off the business.

In a nutshell, whatever the costs may be associated with the succession planning or the unpredictable aftereffects of it, or how tough a job is the choice of an invincible person to fit in the vacant position, it is a necessity today and it is also critical to deciding the future course of the business.

Article Source: http://www.articles4meandu.com

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