In recent years, we have observed many organizations realize the value of developing and promoting internal resources. Reflecting on the work we did 15 years ago, there were significantly more mandates for external selection purposes, than for internal promotion and development. Today, more and more of our clients are investing in developing their emerging Leaders. They have learned from experience that even though it takes time and effort, and the return on investment may not always be immediate, it does bring positive and tangible results.
There are clear benefits associated with the development of internal successors. In his 2012 published research, Matthew Bidwell, assistant professor at the University of Pennsylvania’s Wharton School, discovered that external hires are 61 percent more likely to be exited from the organization than those internally promoted, and 21 percent more likely to leave their job voluntarily. Developing from within allows the organization to generate a pipeline of versatile and well-prepared Leaders, ready to take on the next challenge. The leadership cadre becomes highly motivated, as upper management achieves peace of mind knowing their potential successors are ready to step up. In addition, the successors recognize the investment the organization is making in their development – resulting in improved talent retention.
Having a list of potential successors, and encouraging Leaders to support them in their development, is not enough to be ready for future success. All succession planning efforts have to be integrated into a comprehensive strategy that includes long-term business goals, organizational needs, leadership requirements, and the skills required for each key role. Once this has been determined, a plan can be established to fill the gap between current skills found within the organization and ones that still require development. The plan would ideally follow the 70-20-10 model, in which most of the activities are geared towards on-the-job learning, with mentoring as the next largest component, and the remaining activities consisting of learning in a more traditional training format.
For this process to succeed it has to be championed by upper management, and driven by the business; it cannot simply remain an HR initiative. Individuals selected for the process should be accountable for their development as well. Although these individuals are at the center of a well-organized support system, they need to realize they are the engine of their own development. And last but not least, the development process has to be tied to compensation and promotion. Unfortunately, integrating succession planning and the development of emerging Leaders into the reward system is often the missing piece. As Glen Gilkey, Fluor’s senior vice president of HR, states in a Workforce article published in March 2013, “Having a culture where people want to help others succeed can’t be understated. It doesn’t cost a lot of money, but it does require a lot of time on the part of the leadership team.” In order to ensure sustainability and make it a part of the culture, executives need to be recognized for their efforts. Part of their compensation should be tied to their efforts in supporting talent development, and increasing the promotability of their people.
At MarchFifteen, we’ve been privileged to witness our clients’ success with their succession planning and talent management strategies. There have been especially tremendous results when organizations align their strategies to business imperatives, implement their plans accordingly, and hold the various stakeholders accountable.
As you develop your strategy and plan, we hope that you can relate to and benefit from the thoughts and ideas shared in this post. And as always, we welcome your comments and would love to hear your success stories.
