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A Succession Planning Exercise

by Sep 1, 2009, 5:16 am ET

crl_mastheadReview your senior leadership positions. You might take the top 2% or 10%; whatever is a logical method to review your organization’s top tier talent. It might be that you review all director and above positions, or VP and above. You may wish to review only positions in a certain pay grade and above. (By the way, I’ve got a more in-depth article on executive pay coming up in the Journal of Corporate Recruiting Leadership.)

As you review these positions, find out if there is a person or persons in the organization who could take that individual’s position should it become vacant. Document who could fill the void, and/or make note if there is no one who could fill the position, should it become vacant. You might also make note of any imminent retirements in any key positions over the next few years as well. Once complete, you will have a clear understanding of which positions you need to plan recruiting for and when that recruiting might be coming online. Make this a subset of your strategic workforce plan.

After you complete this top talent succession planning exercise, compute the following ratio:

Numerator: the number of top-tier positions with at least one fully qualified person who is ready to take the place of the incumbent.

Denominator: the total number of top-tier positions assessed.

This is what Jac Fitz-enz refers to as the “human capital readiness level.” According to Fitz-enz, “this is the percentage of key positions with at least one fully qualified (competent) person ready to take over now. Applying the readiness criterion to key positions yields a picture of what he calls the organization’s “general human capital health.”

As you make plans for succession over time, your ratio will go down. Track and measure this and share with your executives. This is a highly strategic exercise and of great value to your organization. Planning our workforce for the future, especially our key leadership positions, are the most important outcomes recruiting leaders can deliver to our organizations.

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

  • nicholas garbis

    Hi John –

    I like the HC Readiness metric quite a bit. I think organizations should also be looking at other (traditional?) HC metrics for those employees who are in succession pools: turnover/retention rates, promo/transfer rates, engagement, etc.

    Another valuable view would be the sources/departments of the successor pool. Yesterday, I was consulting with a large medical device company, and this came up — ‘We need to know if our successors are 90% coming from Finance….and if that is a good or bad thing. We don’t know that right now.’

    Nicholas Garbis, Sr. Consultant
    Infohrm – Global leader in Workforce Planning & Analytics
    http://www.infohrm.com