EXECUTIVE SUMMARY
The project explains the concept of succession planning and how it is
important for the successful functioning of a business. It proceeds to
highlight the business functioning trend in India which mainly is about
family businesses. But seeing the recent trend of few of the big Indian
businesses opting for proper professionally planned succession planning,
it isn‘t long when India will pick up this practice in every aspect.
Many recent examples of succession planning in the Indian businesses
have been stated such as axis bank, Tatas, Infosys, ONGC, Eicher etc.
With main focus on Murugappa group and Infosys succession planning.
Murugappa group of companies is a great example of family business
training their heirs in a professional manner to lead the business where as
Infosys shows how a proper committee should be formed for looking out
for a successor well in advance.
Introduction to Human Resource Management
Human resources are the most valuable and unique assets of an organization. The successful management of an organization's human resources is an exciting, dynamic and challenging task, especially at a time when the world has become a global village and economies are in a state of flux. The scarcity of talented resources and the growing expectations of the modern day worker have further increased the complexity of the human resource function. Even though specific human resource functions/activities are the responsibility of the human resource department, the actual management of human resources is the responsibility of all the managers in an organization.
It is therefore necessary for all managers to understand and give due importance to the different human resource policies and activities in the organization. Human Resource Management outlines the importance of HRM and its different functions in an organization. It examines the various HR processes that are concerned with attracting, managing, motivating and developing employees for the benefit of the organization.
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[/b]
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[/b]
INTRODUCTION TO SUCCESSION PLANNING.[/b]
Succession Planning
“Thinking About Tomorrow Today”
In organizational development, succession planning is the process of identifying and preparing suitable employees through mentoring, training and job rotation, to replace key players — such as the chief executive officer (CEO) — within an organization as their terms expire. From the risk management aspect, provisions are made in case no suitable internal candidates are available to replace the loss of any key person. It is usual for an organization to insure the key person so that funds are available if she or he dies and these funds can be used by the business to cope with the problems before a suitable replacement is found or developed.
Succession Planning involves having senior executives periodically review their top executives and those in the next-lower level to determine several backups for each senior position. This is important because it often takes years of grooming to develop effective senior managers. There is a critical shortage in companies of middle and top leaders for the next five years. Organizations will need to create pools of candidates with high leadership potential.
Succession planning involves a careful balancing of the concerns and needs of a firm’s founding and senior managers, on the one hand, and its more junior investment professionals and managers, on the other hand. The founding and senior managers want to be properly rewarded for their efforts in building and growing the firm, and this may include rights to continue to participate in fund economics after these managers have begun to wind down their active involvement. These desires must be balanced against the need to provide increased economic benefits and firm governance rights to junior managers and investment professionals in order to develop the next generation of managers for the firm.
Definition
Succession planning can be broadly defined as identifying future potential leaders to fill key positions. Wendy Hirsh1 defines succession planning as 'a process by which one or more successors are identified for key posts (or groups of similar key posts), and career moves and/or development activities are planned for these successors. Successors may be fairly ready to do the job (short-term successors) or seen as having longer-term potential (long-term successors).'
According to Hirsh, succession planning sits inside a very much wider set of resourcing and development processes called 'succession management', encompassing management resourcing strategy, aggregate analysis of demand/supply (human resource planning and auditing), skills analysis, the job filling process, and management development (including graduate and high-flyer programmes).
Enforcing the succession plan:
A careful and considered plan of action ensures the least possible disruption to the person’s responsibilities and therefore the organization’s effectiveness. Examples include such a person who is:
• suddenly and unexpectedly unable or unwilling to continue their role within the organization;
• accepting an approach from another organization or external opportunity which will terminate or lessen their value to the current organization;
• indicating the conclusion of a contract or time-limited project; or
• moving to another position and different set of responsibilities within the organization.
Coverage
Organisations differ in size, scope and type, so it is difficult to point to any single model of succession planning. However, it is most common for succession planning to cover only the most senior jobs in the organisation, plus short-term and longer-term successors for these posts. The latter groups are in effect on a fast-track, and are developed through job moves within various parts of the business. This focus on the most senior posts - perhaps the top two or three levels of management - means that even in large organisations, only a few hundred people at any given time will be subject to the succession planning process. It also makes the process more manageable, because it is much easier to concentrate on a few hundred individuals rather than (say) several thousand. That said, however, many large organisations attempt to operate devolved models in divisions, sites or countries where the same or similar processes are applied to a wider population.
The role of HR
Succession planning needs to be owned by line managers, and should be actively led by the chief executive who has a key role in ensuring that it is given the importance it deserves by other senior managers; ensuring that there is a healthy pipeline of potential leaders is about nothing less than the future of the organisation. But it is not realistic for CEOs and those around them to have sole responsibility for this; they have neither the time nor the expertise.
The HR function therefore has a critical role in supporting and facilitating the process, not least in compiling all the necessary information on potential candidates. Any career move at senior level is a process of multiple dialogues, in which a senior representative from HR will collect views from senior line managers in an iterative fashion, testing, challenging and amending them as the dialogue goes on, making sure that all possibilities are covered, and maybe putting proposals for decision to a succession development committee. HR departments are of course also heavily involved in giving career advice and information to individuals, and assessing and advising on their development needs. The HR function is also centrally concerned in the design and management of assessment processes and information support, including the development and maintenance of computerised databases.
IMPORTANCE OF SUCCESSION PLANNING[/b]
[/b]
Succession planning is an essential part of doing business, no matter how certain your future appears. It's easy to put off planning when everything seems to be going so well, right? Wrong. Now is the time to begin succession planning. Here are some reasons why it can't — and shouldn't — wait:
You can't plan for disaster. No matter how good you and your staff are at revenue projections or economic predictions, no one can truly plan for disaster. Whether it's an unforeseen illness, a natural disaster, or a CEO's decision to suddenly retire, the reasons for having a succession plan in place before it is needed are endless. So while you can't plan for disaster, you can put into place a series of contingencies that will help your company stay afloat if, in fact, catastrophe occurs.
Succession planning benefits the business now. Just as business practices have evolved over the years, succession planning has also grown and changed. It's no longer a plan that can only be accessed when leadership is going to change; a succession plan can be used before its "real" intent is necessary. It can be used to build strong leadership, help a business survive the daily changes in the marketplace, and force executives to review and examine the company's current goals.
Succession planning gives your colleagues a voice. If you're running a family business, the process of succession planning will give family members an opportunity to express their needs and concerns. Giving them that voice will also help create a sense of responsibility throughout the organization, which is critical for successful succession planning. Resist the temptation to solely carry the entire weight of creating and then sustaining a plan.
A succession plan can help sustain income and support expenses. Talking about money should be a priority. People generally don't want to work for free and things don't pay for themselves. A succession plan can provide answers as to what you — and your staff — will need for future income, as well as what kinds of expenses you may incur once you step out of the main leadership role. Ask yourself questions about your annual income and other benefits including health and dental insurance for you and your dependents, life insurance premiums paid for by the company, your car, professional memberships, and other business-related expenses.
Succession planning gives you a big picture. Some companies mistakenly focus solely on replacing high-level executives. A good succession plan can go further, however, and force you to examine all levels of employees. The people who do the day-to-day work are the ones keeping the business going. Neglecting to add them to the succession planning mix could have dire consequences. As you develop your plan, incorporate all layers of management and their direct reports.
Succession planning strengthens departmental relationships. When regular communication occurs between departments you are more likely to experience synergy, which breeds a culture of strength. Make sure that you link your succession planning activities with human resources. After all, HR is about people. By including HR in succession planning, you can incorporate elements like the employee-evaluation process, which can help when deciding whether to fill vacancies with internal candidates.
Succession planning keeps the mood buoyant. Change — a major component of a succession plan — is exciting and can bring a company unforeseen rewards. Still, change can be a source of tremendous stress, especially when people's livelihoods are at stake. As you put your succession plan together, consider its positive effects on the business. Planning for the future is exciting and, if done correctly, can inspire your workers to stay involved and maintain company loyalty. It's true that a plan is often put into place to avert catastrophe, but it's also a company's way of embracing the future — a business strategy that is essential for survival.
[/list]
[/b]
SUCCESSION PLANNING PROCESS
Succession planning recognizes that some jobs are the lifeblood of the organization and too critical to be left vacant or filled by any but the best qualified persons. Effectively done, succession planning is critical to mission success and creates an effective process for recognizing, developing, and retaining top leadership talent.
Success factors
There are several factors typically found in successful succession planning initiatives. For example:
Senior leaders are personally involved.
Senior leaders hold themselves accountable for growing leaders.
Employees are committed to their own self-development.
Success is based on a business case for long-term needs.
Succession is linked to strategic planning and investment in the future.
Workforce data and analysis inform the process.
Leadership competencies are identified and used for selection and development.
A pool of talent is identified and developed early for long-term needs.
Development is based on challenging and varied job-based experiences.
Senior leaders form a partnership with human resources.
Succession planning addresses challenges such as diversity, recruitment, and retention.
Effective succession planning
The following information includes:
• A graphic representation of a six-step process for effective succession planning
• A table with descriptions of each step in this process.
Step 1: Link Strategic and Workforce Planning Decisions
This step involves:
Identifying the long-term vision and direction
Analyzing future requirements for products and services
Using data already collected
Connecting succession planning to the values of the organization
Connecting succession planning to the needs and interests of senior leaders.
Step 2: Analyze Gaps
This step involves:
Identifying core competencies and technical competency requirements
Determining current supply and anticipated demand
Determining talents needed for the long term
Identifying “real” continuity issues
Developing a business plan based on long-term talent needs, not on position replacement.
[/b]
Step 3: Identify Talent Pools
This step involves:
Using pools of candidates vs. development of positions
Identifying talent with critical competencies from multiple levels—early in careers and often
Assessing competency and skill levels of current workforce, using assessment instrument(s)
Using 360° feedback for development purposes
Analyzing external sources of talent.
Step 4: Develop Succession Strategies
This step involves:
• Identifying recruitment strategies:
- Recruitment and relocation bonuses
- Special programs
• Identifying retention strategies:
- Retention bonuses
- Quality of work life programs
• Identifying development/learning strategies:
- Planned job assignments
- Formal development
- Coaching and mentoring
- Assessment and feedback
- Action learning projects
- Communities of practice
- Shadowing.
Step 5: Implement Succession Strategies
This step involves:
Implementing recruitment strategies (e.g., recruitment and relocation bonuses)
Implementing retention strategies (e.g., retention bonuses, quality of work life programs)
Implementing development/learning strategies (e.g., planned job assignments, formal development, Communities of Practice)
Communication planning
Determining and applying measures of success
Linking succession planning to HR processes
– Performance management
– Compensation
– Recognition
– Recruitment and retention
The project explains the concept of succession planning and how it is
important for the successful functioning of a business. It proceeds to
highlight the business functioning trend in India which mainly is about
family businesses. But seeing the recent trend of few of the big Indian
businesses opting for proper professionally planned succession planning,
it isn‘t long when India will pick up this practice in every aspect.
Many recent examples of succession planning in the Indian businesses
have been stated such as axis bank, Tatas, Infosys, ONGC, Eicher etc.
With main focus on Murugappa group and Infosys succession planning.
Murugappa group of companies is a great example of family business
training their heirs in a professional manner to lead the business where as
Infosys shows how a proper committee should be formed for looking out
for a successor well in advance.
Introduction to Human Resource Management
Human resources are the most valuable and unique assets of an organization. The successful management of an organization's human resources is an exciting, dynamic and challenging task, especially at a time when the world has become a global village and economies are in a state of flux. The scarcity of talented resources and the growing expectations of the modern day worker have further increased the complexity of the human resource function. Even though specific human resource functions/activities are the responsibility of the human resource department, the actual management of human resources is the responsibility of all the managers in an organization.
It is therefore necessary for all managers to understand and give due importance to the different human resource policies and activities in the organization. Human Resource Management outlines the importance of HRM and its different functions in an organization. It examines the various HR processes that are concerned with attracting, managing, motivating and developing employees for the benefit of the organization.
[/b]
[/b]
[/b]
[/b]
INTRODUCTION TO SUCCESSION PLANNING.[/b]
Succession Planning
“Thinking About Tomorrow Today”
In organizational development, succession planning is the process of identifying and preparing suitable employees through mentoring, training and job rotation, to replace key players — such as the chief executive officer (CEO) — within an organization as their terms expire. From the risk management aspect, provisions are made in case no suitable internal candidates are available to replace the loss of any key person. It is usual for an organization to insure the key person so that funds are available if she or he dies and these funds can be used by the business to cope with the problems before a suitable replacement is found or developed.
Succession Planning involves having senior executives periodically review their top executives and those in the next-lower level to determine several backups for each senior position. This is important because it often takes years of grooming to develop effective senior managers. There is a critical shortage in companies of middle and top leaders for the next five years. Organizations will need to create pools of candidates with high leadership potential.
Succession planning involves a careful balancing of the concerns and needs of a firm’s founding and senior managers, on the one hand, and its more junior investment professionals and managers, on the other hand. The founding and senior managers want to be properly rewarded for their efforts in building and growing the firm, and this may include rights to continue to participate in fund economics after these managers have begun to wind down their active involvement. These desires must be balanced against the need to provide increased economic benefits and firm governance rights to junior managers and investment professionals in order to develop the next generation of managers for the firm.
Definition
Succession planning can be broadly defined as identifying future potential leaders to fill key positions. Wendy Hirsh1 defines succession planning as 'a process by which one or more successors are identified for key posts (or groups of similar key posts), and career moves and/or development activities are planned for these successors. Successors may be fairly ready to do the job (short-term successors) or seen as having longer-term potential (long-term successors).'
According to Hirsh, succession planning sits inside a very much wider set of resourcing and development processes called 'succession management', encompassing management resourcing strategy, aggregate analysis of demand/supply (human resource planning and auditing), skills analysis, the job filling process, and management development (including graduate and high-flyer programmes).
Enforcing the succession plan:
A careful and considered plan of action ensures the least possible disruption to the person’s responsibilities and therefore the organization’s effectiveness. Examples include such a person who is:
• suddenly and unexpectedly unable or unwilling to continue their role within the organization;
• accepting an approach from another organization or external opportunity which will terminate or lessen their value to the current organization;
• indicating the conclusion of a contract or time-limited project; or
• moving to another position and different set of responsibilities within the organization.
Coverage
Organisations differ in size, scope and type, so it is difficult to point to any single model of succession planning. However, it is most common for succession planning to cover only the most senior jobs in the organisation, plus short-term and longer-term successors for these posts. The latter groups are in effect on a fast-track, and are developed through job moves within various parts of the business. This focus on the most senior posts - perhaps the top two or three levels of management - means that even in large organisations, only a few hundred people at any given time will be subject to the succession planning process. It also makes the process more manageable, because it is much easier to concentrate on a few hundred individuals rather than (say) several thousand. That said, however, many large organisations attempt to operate devolved models in divisions, sites or countries where the same or similar processes are applied to a wider population.
The role of HR
Succession planning needs to be owned by line managers, and should be actively led by the chief executive who has a key role in ensuring that it is given the importance it deserves by other senior managers; ensuring that there is a healthy pipeline of potential leaders is about nothing less than the future of the organisation. But it is not realistic for CEOs and those around them to have sole responsibility for this; they have neither the time nor the expertise.
The HR function therefore has a critical role in supporting and facilitating the process, not least in compiling all the necessary information on potential candidates. Any career move at senior level is a process of multiple dialogues, in which a senior representative from HR will collect views from senior line managers in an iterative fashion, testing, challenging and amending them as the dialogue goes on, making sure that all possibilities are covered, and maybe putting proposals for decision to a succession development committee. HR departments are of course also heavily involved in giving career advice and information to individuals, and assessing and advising on their development needs. The HR function is also centrally concerned in the design and management of assessment processes and information support, including the development and maintenance of computerised databases.
IMPORTANCE OF SUCCESSION PLANNING[/b]
[/b]
Succession planning is an essential part of doing business, no matter how certain your future appears. It's easy to put off planning when everything seems to be going so well, right? Wrong. Now is the time to begin succession planning. Here are some reasons why it can't — and shouldn't — wait:
You can't plan for disaster. No matter how good you and your staff are at revenue projections or economic predictions, no one can truly plan for disaster. Whether it's an unforeseen illness, a natural disaster, or a CEO's decision to suddenly retire, the reasons for having a succession plan in place before it is needed are endless. So while you can't plan for disaster, you can put into place a series of contingencies that will help your company stay afloat if, in fact, catastrophe occurs.
Succession planning benefits the business now. Just as business practices have evolved over the years, succession planning has also grown and changed. It's no longer a plan that can only be accessed when leadership is going to change; a succession plan can be used before its "real" intent is necessary. It can be used to build strong leadership, help a business survive the daily changes in the marketplace, and force executives to review and examine the company's current goals.
Succession planning gives your colleagues a voice. If you're running a family business, the process of succession planning will give family members an opportunity to express their needs and concerns. Giving them that voice will also help create a sense of responsibility throughout the organization, which is critical for successful succession planning. Resist the temptation to solely carry the entire weight of creating and then sustaining a plan.
A succession plan can help sustain income and support expenses. Talking about money should be a priority. People generally don't want to work for free and things don't pay for themselves. A succession plan can provide answers as to what you — and your staff — will need for future income, as well as what kinds of expenses you may incur once you step out of the main leadership role. Ask yourself questions about your annual income and other benefits including health and dental insurance for you and your dependents, life insurance premiums paid for by the company, your car, professional memberships, and other business-related expenses.
Succession planning gives you a big picture. Some companies mistakenly focus solely on replacing high-level executives. A good succession plan can go further, however, and force you to examine all levels of employees. The people who do the day-to-day work are the ones keeping the business going. Neglecting to add them to the succession planning mix could have dire consequences. As you develop your plan, incorporate all layers of management and their direct reports.
Succession planning strengthens departmental relationships. When regular communication occurs between departments you are more likely to experience synergy, which breeds a culture of strength. Make sure that you link your succession planning activities with human resources. After all, HR is about people. By including HR in succession planning, you can incorporate elements like the employee-evaluation process, which can help when deciding whether to fill vacancies with internal candidates.
Succession planning keeps the mood buoyant. Change — a major component of a succession plan — is exciting and can bring a company unforeseen rewards. Still, change can be a source of tremendous stress, especially when people's livelihoods are at stake. As you put your succession plan together, consider its positive effects on the business. Planning for the future is exciting and, if done correctly, can inspire your workers to stay involved and maintain company loyalty. It's true that a plan is often put into place to avert catastrophe, but it's also a company's way of embracing the future — a business strategy that is essential for survival.
[/list]
[/b]
SUCCESSION PLANNING PROCESS
Succession planning recognizes that some jobs are the lifeblood of the organization and too critical to be left vacant or filled by any but the best qualified persons. Effectively done, succession planning is critical to mission success and creates an effective process for recognizing, developing, and retaining top leadership talent.
Success factors
There are several factors typically found in successful succession planning initiatives. For example:
Senior leaders are personally involved.
Senior leaders hold themselves accountable for growing leaders.
Employees are committed to their own self-development.
Success is based on a business case for long-term needs.
Succession is linked to strategic planning and investment in the future.
Workforce data and analysis inform the process.
Leadership competencies are identified and used for selection and development.
A pool of talent is identified and developed early for long-term needs.
Development is based on challenging and varied job-based experiences.
Senior leaders form a partnership with human resources.
Succession planning addresses challenges such as diversity, recruitment, and retention.
Effective succession planning
The following information includes:
• A graphic representation of a six-step process for effective succession planning
• A table with descriptions of each step in this process.
Step 1: Link Strategic and Workforce Planning Decisions
This step involves:
Identifying the long-term vision and direction
Analyzing future requirements for products and services
Using data already collected
Connecting succession planning to the values of the organization
Connecting succession planning to the needs and interests of senior leaders.
Step 2: Analyze Gaps
This step involves:
Identifying core competencies and technical competency requirements
Determining current supply and anticipated demand
Determining talents needed for the long term
Identifying “real” continuity issues
Developing a business plan based on long-term talent needs, not on position replacement.
Step 3: Identify Talent Pools
This step involves:
Using pools of candidates vs. development of positions
Identifying talent with critical competencies from multiple levels—early in careers and often
Assessing competency and skill levels of current workforce, using assessment instrument(s)
Using 360° feedback for development purposes
Analyzing external sources of talent.
Step 4: Develop Succession Strategies
This step involves:
• Identifying recruitment strategies:
- Recruitment and relocation bonuses
- Special programs
• Identifying retention strategies:
- Retention bonuses
- Quality of work life programs
• Identifying development/learning strategies:
- Planned job assignments
- Formal development
- Coaching and mentoring
- Assessment and feedback
- Action learning projects
- Communities of practice
- Shadowing.
Step 5: Implement Succession Strategies
This step involves:
Implementing recruitment strategies (e.g., recruitment and relocation bonuses)
Implementing retention strategies (e.g., retention bonuses, quality of work life programs)
Implementing development/learning strategies (e.g., planned job assignments, formal development, Communities of Practice)
Communication planning
Determining and applying measures of success
Linking succession planning to HR processes
– Performance management
– Compensation
– Recognition
– Recruitment and retention