William J. Rothwell - Effective Succession Planning (2005)(3-e)(en)

Exhibit 14-1. A Worksheet to Structure Your Thinking About Predictions for Succession Planning and Management in the Future

Directions: Use this worksheet to structure your thinking about possible predictions that may influence SP&M programs in the future. For each prediction listed in Column 1 below, indicate in Column 2 whether you believe that the prediction is true. Then describe under Column 3 what you believe the prediction means in your organization and under Column 4 how much impact that prediction will have in your organization. Finally, under Column 5, offer suggestions about what your organization should do about the prediction. There are no ‘‘right’’ or ‘‘wrong’’ approaches to addressing these predictions. Instead, use this worksheet to do some brainstorming about predictions affecting SP&M in your organization in the future.

replacements are considered. A key advantage of this approach is that it prevents inbreeding, since newcomers often bring with them fresh solutions to old organizational problems. A key disadvantage of this approach is that the cycle time required to fill a vacancy can be agonizingly long—and there is no guarantee that someone chosen from outside the organization will successfully adapt to its unique corporate culture.

A second approach is to reorganize. Take just one example: If the vice president of human resources retires, dies, or leaves the organization, the CEO may choose to meet the need by assigning the HR function to another manager. That is just one example of how to solve a talent need by reorganizing. The same approach can be used to meet talent needs in other key positions. Of course, this approach only works if someone qualified is available—and has sufficient interest, motivation, and ability to assume more responsibility.

A third approach is to outsource the work. If this approach is chosen, the challenge is to find a suitable outsourcing partner. That cannot always be done, but it is one option. A disadvantage is that this approach should be used only with activities not directly related to the organization’s core compe- tence—the key strategic strength that sets an organization apart from competitors. It is, after all, unwise to outsource the essence of what makes an organization competitive, since that path can lead to bankruptcy or to a takeover.

A fourth approach is to insource the work. If this approach is used, deci- sion-makers seek to find synergy between two functions. Of course, this assumes that some excess capacity—that is, people or resources—exists somewhere in the organization. Suppose, for instance, that a vacancy for a key position exists in one industrial plant. That need could be met by insourcing the work to another plant operated by the same company. An external partner is not sought. Instead, the function is performed internally. This approach differs from reorganization because the insourcing partner does not permanently assume the duties of the new function but performs them only temporarily.

A fifth approach is to hire, on contract, a temporary replacement for a key position.. Some firms specialize in supplying temporary help, even for positions such as CEO, with which temps have not been historically associated.

A sixth approach is to bring in a consultant to help. While similar to using a temp, this approach differs in that a consultant is usually not on site every day to perform the work, as temps generally are. The consultant, in short, performs the work on a project-to-project basis and may even telecommute. This can reduce costs but may also diminish the impact of the key position on the organization.

A seventh approach is to transfer someone from another part of the organization, temporarily or permanently, to meet a succession need. Of course, it is usually assumed that an individual who is transferred meets at least the basic entry-level requirements for the job. Internal transfers, however, have the disadvantage of touching off a domino effect (sometimes called a musical chairs effect), in which the movement of one person can prompt movements by many others.

An eighth approach is to acquire another organization that possesses the needed talent. In the past, mergers, acquisitions, purchases, and takeovers were sought to realize savings from economies of scale, a desire for higher executive salaries resulting from correlations between senior executive pay and organizational size, and the pursuit of improved integration with such key groups as suppliers, distributors, and even competitors. In the future, however, CEOs will regard mergers, acquisitions, purchases, and takeovers as one means to address talent shortages.5 (That is an issue treated at greater length below.) Organizations with well-known core competencies will become acquisition targets for other firms that are cash rich but are experiencing talent shortages. Instead of struggling to fill one vacancy at a time, organizations will look for other firms to absorb outright to achieve a massive infusion of new talent.

The ninth approach is to reduce or eliminate the work completely. In other words, the work performed by an otherwise critically important function or position could be reduced or eliminated to solve a succession problem. As one way to do that, the CEO can choose to spin off or sell the business or function.

A tenth approach is to delegate the work up to a high potential in the organization. This is, of course, a form of reorganization. But instead of giving responsibility to another manager when the organization experiences a loss of talent, the work is absorbed by the immediate organizational superior.

An eleventh approach is to delegate the work down. As with the tenth approach, it is a form of reorganization. The work of a high-potential employee is absorbed by one or more of his or her subordinates, without promotion. A variation of this approach is to form a team and delegate the work to that group.

A twelfth approach is to form a strategic alliance with another organization to meet succession needs. This usually means arranging a short-term partnership. While strategic alliances have often been formed in product manufacturing, they could also be formed to meet succession needs. However, this approach is potentially useful on a short-term basis only, since few organizations want to lose high-potential talent forever.

A thirteenth approach is to trade needed talent, temporarily or permanently, with other organizations. Similar to a strategic alliance, this approach tends to be even shorter term. Some organizations provide ‘‘loaned executives,’’ for instance, to build the competencies of their high potentials. However, few organizations want to lose their high potentials for an extended time.

A fourteenth approach is to recruit globally rather than domestically, targeting individuals with needed talent outside the United States. Multinational corporations especially may be able to trade talent from one part of the world to another and thereby treat succession issues as moves on a global chessboard.

A fifteenth approach is to hire back managers or other talent. As the U.S. population ages, this approach is already being used by many organizations, such as is the case of Deloitte’s Senior Leaders Program, launched to preserve