opinion | SUCCESSION PLANNING
www.thehrdirector.com
BIG SHOES & HOW TO FILL THEM Time and again, poorly-planned succession processes expose organisations to incalculable risks; a loss
of investor confidence, falling stock value and the departure of clients and employees who feel unsettled by the uncertainty. So why do so many businesses neglect to put the necessary planning in place? Is it the avoidance of difficult conversations or dangerous miscalculation of the inevitable impact?
ARTICLE BY SHAUN HOGAN, SENIOR ASSOCIATE & KATE MAGUIRE, TRAINEE SOLICITOR - STEVENS & BOLTON LLP
The contrast between the recent departures of Paul Polman from Unilever and Martin Sorrell from WPP provides a clear illustration of the difference effective planning can make. It has taken WPP some time to recover from the fallout from the abrupt departure of Martin Sorrell in April 2018 and the resulting vacuum left at the top of the company. This clearly showed that a lack of detailed succession planning can be very damaging, even for an otherwise successful business. In contrast, the steady transition from Paul Polman to Alan Jope as Unilever’s CEO, and the stability that this brought about, demonstrated that an effective succession plan can be instrumental in helping a business survive the exit of a leading individual. Any business, regardless of size and profile, should put in place steps towards appropriate succession planning, but many still fall short. Developing future leaders is at the heart of succession planning and should not just be about those sitting directly below C-suite roles. Employers should seek to nurture talent and provide leadership training at all levels to prevent stagnation, provide a greater sense of progression, and minimise staff attrition. Indeed, with evidence suggesting that millennials are more likely to move around in search of career progression, the need to spread the focus has never been more important. Organisations should, from the top down, foster a culture of mentoring that ensures succession planning is transparent and positive, and encourages an honest, open dialogue between employees and their managers, in order to appropriately manage expectations and avoid demotivation. One of the most important aspects of an effective succession plan is to align it to the future needs identified in the business plan - and the business plan and the succession plan should dovetail - the former highlighting the challenges and opportunities faced by the business and the latter identifying which employees demonstrate the necessary skills and competencies to overcome these challenges. This can help ensure objectivity in the process,
which can also help avoid employment claims from disgruntled employees, who feel overlooked in a promotion exercise. Indeed, in a growing organisation, it is equally important to consider the future expansion of the company and the creation of new roles. In the long term, training employees to develop skills that are transferable across different areas of the business will be key to managing this successfully. If it is clear that there are no suitable internal candidates, of course the obvious consideration is external recruitment. Consideration should be given as to how that might affect the existing team, and being mindful in general of the risks during the succession planning process. Staff identified as future leaders who could pose a
THE BUSINESS PLAN AND THE SUCCESSION PLAN SHOULD DOVETAIL - THE FORMER HIGHLIGHTING THE CHALLENGES AND OPPORTUNITIES FACED BY THE BUSINESS AND THE LATTER IDENTIFYING WHICH EMPLOYEES DEMONSTRATE THE NECESSARY SKILLS
competitive threat - if they were to leave the business - should be required to enter into restrictions limiting their ability to act in competition, or the potential of causing other damage following their exit. These restrictions should be kept under review as the individual’s career progresses and updated where appropriate. Then of course there is retirement succession planning, which in the past was a defined date on the calendar, can now give rise to additional risks. For example, making assumptions about how long an employee will want to continue working, based on their age, could result in a claim of age discrimination. Instead, employers should approach discussions about retirement carefully and without pre-judging the situation. The exit of key individuals can lead to a loss of faith from investors and clients, which would undoubtedly have an adverse effect on the business. This can be overcome by careful consideration of the messaging delivered to such interested parties when an exit happens; this is much easier when the exit has been considered as part of a succession plan.
• FOR FURTHER INFO
WWW.STEVENS-BOLTON.COM
38 | thehrdirector | MAY 2019
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56
