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How to Reduce the Risk of Future Failure by Using Effective Succession Planning

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How to Reduce the Risk of Future Failure by Using Effective Succession Planning

When succession planning it is important to choose a successor that fits well within the organisationThe recent debacle at Manchester United shows how important the need for succession planning is. The decision to allow Sir Alex Ferguson to anoint his “chosen one” successor, David Moyes in the role without a full and open recruitment process did not prove to be a success. Obviously there were other mitigating factors contributing to the failure but it does look from the outside that perhaps the wrong person was chosen.

Those with longer footballing memories will remember the debacle of Brian Clough’s forty four day tenure at Leeds Utd when he replaced Don Revie (who in turn was not an amazing success in the England job!). It was clear now that there was a colossal clash of cultures with Clough going to Elland Road, so just choosing the then most successful manager, to run the then most successful club wasn’t as obvious decision as it appeared at the time. In fact Leeds lost their position of dominance as a result.

So it’s clear that either handing succession planning to the current incumbent or just grabbing what you think is the best candidate out there without a considered approach is probably not the best idea.

How to Choose the Right Person to Succeed You

Interestingly most organisations don’t succession plan very well. This probably goes back to the fact that many don’t do thorough risk management. Within a process of evaluating risks the issue of what happens to key staff should loom large. The chance of this happening, the effect of it, plus the proposed solution and who is responsible for carrying it out is essential as part of the risk management process.

This risk management is essential both in owner managed “family” businesses and particularly charities, where all too often the Director of Chief Executive leaves and the Chair is left holding the baby after the notice period has been served and before a new incumbent can be found. This places even more pressure on the recruitment process and the temptation to “cut corners”. In a family business it’s key to be developing family members over a long period of time so that they can build up the knowledge and experience to be a success in the roles they and the owner would want them to do. It’s also essential that they are supported by the right cadre of senior staff to make their appointment a success.

Risk management should be part of the “Management Review” system that is built into the processes and procedures that determine the operation of the enterprise.

So the key to start with in succession planning must be to have evaluated the risks to the enterprise of key staff leaving and have a plan in place both temporary and long term to manage it. Both the Chair and The Chief Executive should discuss this at regular intervals to determine strategy.

When a key member of staff leaves it’s not always straightforward that the individual is replaced by a “clone”. It could be an opportunity to change the management structure or bring in someone with a different set of skills and approaches that will help develop the enterprise strategically. Aligning the recruitment to strategic direction is key. “Buggins’ turn” or promoting from within or grabbing someone quickly from outside will not do.

The 9 Keys to Effective Succession Planning

1.   Have key staff positions as an integral part of the risk management process

2.   Evaluate and quantify the risks of losing key staff

3.   Have a plan in place to deal with those risks that is in alignment with the strategy of the enterprise

4.   Structure times to regularly review the plan

5.   If it happens take the time and effort to manage the recruitment (or promotion) process properly

6.   Make sure that the definition of the role and the experience and personality of the person to do that role aligns with the strategy

7.   Use external help or opinion to test and evaluate your thoughts and approach

8.   Consider restructuring your team as part of the process. A person leaving can be an opportunity not only a threat.

9.   Make sure that the person recruited fits the dynamic of the team and the way you want the team to develop.

 

image via toddwshaffer

Read more about Succession Planning in our white paper which explains what organisations can do to help implement a plan.

 

Download our succession planning white paper

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David Seall - Chairmen of the Board of Practice for Ramsey Hall

David Seall is well known to many businesses across London and the South East as an Independent Director and Chartered Engineer specialising in the Manufacturing and Engineering sectors. David worked for many years in the Aerospace and Defence industry and was Chief Executive of the Engineering Employers Federation for London and the South East (EEF South) for over 10 years, working with hundreds of companies.


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