Line of succession
While succession planning has traditionally been seen as the exclusive domain of senior management, HBOS Insurance and Investment takes a broader approach. Every six months, its senior directors are asked to assess which roles within their division are critical to the organisation – in other words, roles that would damage the business if they were left vacant, rather than merely being inconvenient. Given that it can take six months to recruit an external replacement for some positions, managers are then asked whether they have sufficient strength and depth in their departments to cover any key vacancies.
The answer – in a number of cases at least – appears to be no. While the company will continue to groom existing employees to step up into senior roles, Pat O’Kane, head of leadership and organisational development, fears the Insurance & Investment arm won’t be able to develop enough team members in sufficient time to plug all the potential gaps. That’s why it’s about to go on a targeted recruitment campaign to find talented managers who’ll be able to take up positions anywhere within the business, as they become available.
“I had one-to-one meetings with individual members of the board to see what roles they were looking at,” he says. “They’re not looking for specific technical skills. They’re looking for people who are very strong leaders, very bright – so not a finance person or an IT person as such, but someone whose real strength is in general management, and who has the ability to deal with change and is able to lead people. Rather than waiting for a gap, we’re being more proactive.”
The company’s campaign isn’t a rash hiring spree – it’s looking to start small, and grow the programme in later phases. But it does signal that even where an organisation like HBOS is fully committed to developing high calibre people internally, comprehensive succession planning almost inevitably involves identifying and recruiting some external candidates – and the right people aren’t always there when they’re needed. With talent in increasingly short supply, more and more organisations will face severe challenges in the future when key members of their team move on.
In some respects, the ever-changing business environment at HBOS Insurance and Investment helps to give this kind of programme more immediacy. New appointments have been made to the board and reporting lines have recently changed, raising awareness of key roles and putting the spotlight on key management talent. But it shouldn’t take organisational change to alert other companies to what is a critical management issue. So why is succession planning still so frequently overlooked?
Part of the problem, as O’Kane points out, is that much of the analytical focus in people management is on past events, particularly in terms of performance measurement. Planning for the future is often done with far less attention to detail, and tends to focus on the ability to meet short-term, planned need – not short- or medium-term unplanned events.
Another problem is scope. Companies often restrict succession planning initiatives to the top management team, ignoring the fact that critical roles exist throughout the organisational hierarchy. Losing the only IT manager who understands the way your ageing mainframe works could cause huge operational problems, for example, while the departure of an account manager who’s developed a close friendship with your best customer may well trigger an impromptu competitive review. In essence, succession planning isn’t simply a people management issue. “The language we use is around risk, says O’Kane. “Managers understand risk and the costs involved.”The competency perspective
HBOS Insurance and Investment links its succession planning to a competency assessment and career development programme that spans its entire employee base. The competency programme is built around four key attributes – Lead, Shape, Build and Deliver – that are deployed across the entire HBOS group. As well as assessing what employees do, the competencies are used as metrics for managers to rate whether employees meet, exceed or fall below expectations in terms of how they do their jobs.
Employees identified as having potential for development are put through an assessment centre, working with specialist assessors and line managers to develop a custom-built programme to take their careers forward. This programme ensures that the most talented in-house employees have a structured development plan mapped out for them, a key weapon in talent retention. But it also provides critical information to HBOS about the pool of talent that’s waiting in the wings, how effectively it’s being nurtured – and from a succession planning perspective, how much time individuals need before they can comfortably take over specific roles.
One advantage of this kind of structured approach that’s frequently overlooked is that it gives you a company-wide perspective on the people who are being lined up for greater things. It’s not uncommon for one talented individual employee to feature in multiple succession plans – which in practice means they’re likely to fill the first vacancy that comes up, leaving a gaping succession hole for all the rest.
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© Webster Buchanan Research 2013