Accelerate May 2015 - Page 51

HR Effectiveness Warren Buffett has been called the “Oracle of Omaha” and is the most successful businessman of the twentieth century and one of the world’s most influential thinkers today. His books, articles and letters are closely scrutinised for replicable insights into business success. Every other year for the past five decades, he’s given us clear and simple management advice requiring succession planning. Industry analyst Josh Bersin’s research shows that only 32 percent of organisations are capable of identifying talent to fill key positions. Even for those companies who have succession management processes, the vast majority of these are fragmented and only focused on replacing senior level talent. While Buffett’s request of his management team doesn’t exactly qualify as “best in class” succession planning, it does go beyond just a list of names. He requests that his managers “summarise the strengths and weaknesses of your primary candidate as well as any possible alternates you may wish to include.” More sophisticated organisations ensure that succession planning efforts are grounded in business strategy by identifying key positions based on the strategy rather than just listing out successors Even for those companies who have succession management processes, the vast majority of these are fragmented and only focused on replacing senior level talent. for the most senior roles. While it is important to plan for leadership succession, ensuring business continuity requires a look beyond a small group of leaders to plan for talent needs in mission critical positions at all levels. For example, the most successful technology and energy companies implement succession planning for key technical roles (e.g., computer scientists, petroleum engineers) in addition to management roles. Companies who are serious about succession planning are more successful overall. Berkshire Hathaway is one great example but Bersin’s research has demonstrated that companies that employ integrated succession management are much more likely to be effective at responding to changes in business climate and accelerating business growth. The University of North Carolina’s research shows that companies with an integrated succession planning programme are 18 percent more likely to be high performing organisations. Implementing an integrated succession planning programme may sound daunting for companies who have never undertaken such an effort before. Our advice for HR and business leaders considering succession planning is to start simple. Don’t try to emulate GE’s rigorous and well documented process overnight. Begin with something manageable and proportional to your business size and people risk tolerance. Key ideas to consider include: 1. Identify key roles beyond senior leaders, but focus on the most critical roles in the beginning. 2. Start by naming successors for key roles based on manager judgement – like Warren Buffett. You can evolve to more sophisticated approaches as your process develops. 3. Measure outcomes – such May 2015 51