Human Resource Management 15th Edition by Robert Mathis,John Jackson,Sean Valentine ,Patricia Meglich

Exercise 2

Do's and Don'ts of Succession Planning
Many leaders readily acknowledge the importance of succession planning in companies. However, they often don't follow that philosophy with action. Research shows that less than half of executives believe that their organizations do an adequate job of grooming successors. Unplanned vacancies take about three months to fill, leaving a significant gap in the organization's leadership team. The following do's and don'ts represent best practices for effective succession planning:
• DO be forward focused. Look to the future and determine what competencies will be needed in five or ten years. Simply duplicating the leadership skills and style of current leaders is not likely to move the organization forward as times and demands change.
• DO align compensation with succession planning. Incentivize key leaders to create a working succession plan and mentor individuals identified as possible successors. Paying a bonus or other reward to executives who attend to this important task will get them to focus on getting it right. It is also advisable to offer deferred compensation (such as stock options) to those on the succession path. This keeps them invested in the organization and cuts down on turnover.
• DO consider soft skills. Development efforts should key in on interpersonal skills, emotional intelligence, problem-solving, creativity, and other vital leadership competencies. Investing too much time in functional, technical training will produce successors who are not effective at leading their team or organization.
• DON'T wait until a vacancy occurs to begin succession planning. At that point, it is a race to the finish, not an orderly, thoughtful development process. Every manager's number one priority should be identifying and preparing potential successors.
• DON'T identify one individual for each role. Putting all of your eggs in one basket is a risky proposition. The successor may leave the organization prematurely or may not develop successfully. Leading firms bring along multiple candidates with the understanding that choosing from among a pool is superior to having only one choice.
• DON'T keep succession plans a secret. Stakeholders have a vested interest in knowing that executives are planning for the future. Share the overall strategy with important parties. While specifically naming successors may not be necessary, assuring stakeholders that there is a living, working process calms their concerns.
Considering the importance of succession planning, it is disappointing that so few organizations have implemented robust programs. Answer the following questions relative to succession planning best practices:
What role should the board of directors, HR, and executives each play to ensure effective succession planning?