Effective Succession Planning: Ensuring Leadership Continuity and Building Talent from Within, Fourth Edition

16 Background Information About Succession Planning and Management

themselves because people of other sexes, races, and backgrounds do likewise.) That

practice, of course, perpetuates such problems as the so-called glass ceiling and other

subtle forms of employment discrimination. To avoid these problems and to promote

diversity and multiculturalism in the workplace, systematic efforts must be made to

identify and groom the best successors for key positions, not just rely on managers to

clone themselves.

Succession planning and management is important for other reasons as well.

Indeed, it ‘‘forms the basis for (1) communicating career paths to each individual;

(2) establishing development and training plans; (3) establishing career paths and

individual job moves; (4) communicating upward and laterally concerning the man-

agement organization; and (5) creating a more comprehensive human resources plan-

ning system.’’

18

As I have toured the United States—and other countries—to do public speaking

and consulting about succession, I am often asked, ‘‘How do we make the case for

succession in our organizations?’’ To answer that, I ask whether the questioners face

supportive or skeptical CEOs. If the CEO is supportive, then the most important

customer has already been convinced. But if the CEO is skeptical, then some effort

should be made to analyze the risks that the organization may face. (This is called risk

analysis.)

One way to do that is to request from the payroll department the projected retire-

ment dates for the organization’s entire workforce. That should also be done for

three-year rolling periods to assess what percentage of the workforce is eligible to

retire at various points in time. Then the percentage of workers eligible to retire can

be assessed by location, job code, or level on the corporate hierarchy. The goal is to

see if some areas, levels, or regions will be more at risk than others. If the results are

shocking (and sometimes they are), then the data may convince a skeptical CEO that

something must be done to develop talent—and to preserve the specialized knowledge

and special social contacts, gained from experience, of those who are about to

leave—in areas deemed particularly at risk.

Reasons for a Succession Planning

and Management Program

Why shoul d an organization supp ort a systematic SP&M program? To answer that

question I updated a survey that I first sent out in 1993 for the first edition of this book.

The survey for the fourth edition was sent out in January 2009 to members of the

Human Resource Planning Society (HRPS), and the results were compiled in February

2009. Exhibit 1-3 presents demographi c information about the respondents’ industrie s

from the 2009 survey; Exhibit 1-4 charts the sizes of the respondents’ organizations;

Exhibit 1-5 presents information about the respondents’ job functions; and Exhibit 1-6

American Management Association

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What Is Succession Planning and Management? 17

Exhibit 1-3. Demographic Information about Respondents to a 2009

Survey on Succession Planning and Management: Industries

Question: In what industry is your organization classified?

Percentage Valid

Industry Frequency (%) Percentage (%)

Manufacturing 6 15.4 15.8

Transportation/communication/

electronics/gas 3 7.7 7.9

Finance/insurance/real estate 6 15.4 15.8

Health care 2 5.1 5.3

Government/armed forces 2 5.1 5.3

Other 19 48.7 50.0

Missing 1 2.6

Total 39 100.0 100.0

Note: Not all respondents chose to answer this question.

Source: William J. Rothwell, Jin Gu Lee, and Hong Min Kim, Results of a 2009 Survey on Succession Planning and Management

Practices. Unpublished survey results (University Park, Pa.: The Pennsylvania State University, 2009).

Exhibit 1-4. Demographic Information about Respondents to a 2009

Survey on Succession Planning and Management: Size

Question: How many people does your organization employ?

Size Frequency Percentage (%)

0–99 5 12.8

100–249 4 10.3

250–499 4 10.3

500–1,999 5 12.8

2000–4,999 6 15.4

5,000 or more 15 38.5

Missing 0 0.0

Total 39 100.0

Note: Not all respondents chose to answer this question.

Source: William J. Rothwell, Jin Gu Lee, and Hong Min Kim, Results of a 2009 Survey on Succession Planning and Management

Practices. Unpublished survey results (University Park, Pa.: The Pennsylvania State University, 2009).

American Management Association

www.amanet.org