Talent Management - October 2008 - (Page 43)

The Beneﬁts of Talent-Pool Succession Plans Sean Conrad In most organizations, HR professionals and executives readily admit they need to better understand the potential talent in their companies and do a better job of rewarding competent, loyal leaders. Succession planning, when integrated into the overall employee performance and talent management strategy, can provide organizations with valuable insight into their leadership pipelines. But a well-managed succession planning process should seek to not only prime leaders for the future, but reward them today as part of a bigger drive for retention. There are many approaches to succession planning. One of the more common has been the org-chart replacement model in which employees are groomed for a speciﬁc position. Ideally, however, succession planning should focus on developing people rather than merely naming them as replacements. With this premise at its core, the talent-pool approach to succession planning recently has emerged as a best practice that establishes a larger number of employees for promotion. This larger group is more likely to stay loyal and possess skills that are easily aligned with the organization’s strategic plan. In this model, high-potential candidates are placed in talent pools and then receive development — which may include speciﬁc types of training and education — in preparation for possible promotion. The organization commits to helping these individuals prepare to qualify for greater responsibilities, but ultimately, it is up to the individuals to perform well in their jobs while simultaneously equipping themselves to meet the new challenges of more senior positions. The talent-pool approach to succession planning can be a great ﬁrst step in rewarding loyal leaders, as they are not promised a speciﬁc position, but rather are recognized over time for their skills development, day-to-day performance and ongoing achievements. This approach provides a powerful tool set talent managers can use to recognize key leadership candidates and plan long-term bench strength. Further, with talent pool-based succession planning, organizations are better able to get an ongoing snapshot of their workforces’ potential and areas of retention risk while creating a larger pool of capable employees poised to take on leadership positions. Capital District Physicians Health Plan (CDPHP) — an Albany-based, nonproﬁt, individual practice association HMO — introduced talent pool-based succession planning linked to its employee performance management to better address its strategic plans. With this approach, CDPHP can cultivate the necessary skills and competencies in high-potential employees by focusing on career and development planning. The organization began the process by asking ﬁve questions to gauge which of their managers were at high risk to leave the organization and which were high potential. Of the organization’s 100 managers, approximately 77 were rated as high potential. From there, three talent pools within management levels —entry, mid and executive — were identiﬁed. CDPHP is taking steps to reward the 77 high potentials by building a customized development plan for each manager. As in the CDPHP example, by moving beyond the orgchart replacement methodology and working closely with high-potential leaders, talent managers can take development and succession planning to the next level. Organizations also are better equipped to manage retention risk and build employee loyalty. For future leaders and the organizations that need them, opportunities that go beyond regular succession planning processes — such as highly individualized leadership training geared to their speciﬁc competencies or interests — will go a long way to build a robust, long-term talent pipeline. Sean Conrad is a senior product analyst at Halogen Software. He can be reached at editor@talentmgt.com. development budgets, that help make talent more successful and valuable in the long term. The comparisons of mutual funds and talent management may seem a bit artiﬁcial at ﬁrst. But on closer inspection, the drivers of success are quite similar, and increasingly, the driving issue is the same: shareholder value. Take, for example, a recent review of companies by a ﬁnancial expert at The Motley Fool. The valuation of several organizations included insightful analysis of ﬁnancial performance, but also a good study of the potential challenges around succession in key management positions. This type of analysis should serve as a wake-up call that succession and talent management practices are critical to organizational success and key stakeholders are paying attention. Whether an organization is going public, expanding into new markets or operating in a downturn, investors want to know there is talent in place to make it successful. October 2008 Mark Walker is a Chicago-based senior consultant with The Hay Group. He can be reached at editor@talentmgt.com. talent management magazine www.talentmgt.com 43 http://www.talentmgt.com

Table of Contents Feed for the Digital Edition of Talent Management - October 2008

Talent Management - October 2008 Editor’s Letter Contents Human Performance Leading Edge Foundations The Three Pillars of Executive On-Boarding Role-Based Assessment: Thinking Inside the Box Who's Going to Speak Up for Health Care? Obey the Push to Automate Managing the Star Performer No One Wants to Work With Adopting a Mutual-Funds Model for Talent Management Hewlett-Packard: Simple Talent Management in a Technical World Team Effort Pays in Talent at London Business School The Employee Survey: What’s in It for Me? Why Most Managers Are Stuck Advertisers’ Index Editorial Resources Full Potential

Talent Management - October 2008

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