Thursday 6th March, 2008


Succession planning for business growth

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By Jeremy Francis

The problem of continuity is one that most, if not all, companies face. Most executives, whether of private or public companies, would not like to see the company fold, especially under their watch. I have made reference in past articles to the fact that there is a war for talent in corporate T&T.

Companies are all looking to employ people who can grow and sustain their businesses and some would go to great lengths to attract and retain talent.

A look at the human resource landscape reveals that most companies which have been in business for at least 50 years or more have a dominant two-tiered talent structure. On the one hand, you have a number of employees who have seen the business grow possibly from inception. These individuals have a huge resource of intellectual capacity of how the business runs and an even bigger store of institutional memory, based on their years of experience. Many of these employees may have professional certifications but lack graduate degrees. This is also the group that will be retiring soon.

On the other end of the spectrum is a second tier of employees; those who have been with the company for under five years, have graduate degrees, and little work experience.

The battle is for the third, smaller sandwich tier. These are the small group of employees—many in management positions—who are armed with the graduate qualification, have at least seven to ten years of work experience, and have enough institutional memory to make them attractive to your competitors.

The battle for talent in the marketplace is really for this elite group of employees. If in your business this layer is fast disappearing through attrition, you must ensure there are effective succession planning mechanisms in place for the business to grow and thrive.

And this is not for HR managers alone. There are a few key strategies that you can employ to build your succession planning capability:

1. Talent management

The first thing that should be done is an inventory of the talent that currently resides within the company. Some of the questions that should be asked are: what qualifications do my employees have? How long have they been here, and what skills have they attained? If employee X leaves today, what will it take to replace her? Do I have the skills within, or will we have to hire an outsider?

These are a few critical questions that must be answered. This process can get complicated, but it can be as simple as getting out a sheet of paper, writing down the names of your most valued employees, and writing down the specific competencies that they have that make them valuable. Then look at your wider employee base, and see if there is anyone who has these qualities, at least in some measure.

2. Business process


Many businesses know what they do and they do it well. When a key person leaves the organisation, however, the service level suddenly falters and employees don’t have a clear sense of what to do next. The solution? BPM.

BPM is a management model that allows organisations to manage their processes as any other asset and improve and manage them over the period of time. Simply put, if it’s key to the process, then write it down.

The development of process manuals that lists key steps in business processes is a tedious and ongoing process with countless revisions, but unless a business has some way of documenting its institutional history, chances are it will walk out of the door with your key employee when they leave.

3. Training and


Now that you have written down the key skills that employees need in order for the business to function, you may want to consider having both technical and non-technical training done to boost the skills internally.

One of the arguments against training is the fact that some of the well-trained people still leave. But, the fact is, it you don’t train them, they will probably leave anyway.

Additionally, there are contractual arrangements surrounding training that can be put in place to stem the tide.

Training should be done in two prongs: core and non-core. Core would be those areas that are key to the success of the business. If you sell industrial parts, then training should be done in the installation and maintenance of those parts. Non-core does not mean less important; it just refers to training in other areas that support the business, like customer training and leadership.

4. Coaching/mentoring

One great way of transferring institutional memory is through coaching and mentoring, where more experienced and knowledgeable employees are paired with less experienced employees. The catch here is that sometimes the wrong organisational culture can be transferred.

Some employees who have been with the company for many years may be disgruntled and may pass on less-than-effective work habits to their protégés.

To counter this, be careful of your selection, develop a formal programme with a defined timespan, and have deliverables along the way. This can prove to be a very rewarding strategy as more experienced employees feel valued for their knowledge, less experienced employees gain important insights into the business, and the company ensures that the institutional memory is passed on.

This is by no means an exhaustive account of what companies can do to develop their succession planning capability.

The key to the process is not to think of the future, but to think of the future of present decisions. Succession planning must start NOW. If you wait for critical events in the business to trigger it, it may be too late.

Jeremy Francis is an engagement manager, Centre for Leadership Assessment &

Development, Arthur Lok Jack Graduate School of Business.

He can be reached at [email protected]

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