As the business world continues to move at an ever-increasing speed, companies barely have time to deal with the day-to-day grind, let alone think about the future. With this mindset, talent strategies like succession planning may get swept aside.
Tony Kucharski, president of K-1 Financing, a specialty finance company, said he knows this story all too well. He joined his family’s business, a warehouse and storage company in the Chicago area, when he was in his early 20s. Kucharski, author of the e-book Pass It On: A Short Guide to Succession in Business, said he had dreams of expanding to other entrepreneurial ventures, but he could barely take an afternoon off without getting calls from his employees. “I thought if I can’t even take an afternoon off without getting multiple phone calls, what happens if I get in an accident and I’m out of work for weeks?”
This “in case of emergency” scenario comes up again and again in succession talks and was the impetus for Kucharski to set up a succession plan. He assessed where his business had staff weaknesses and set up a clear line of communication so employees knew they were expected to know the tasks performed by their superior.
The Sarbanes-Oxley Act, a piece of legislation passed in 2002, requires all publicly traded companies to have a succession plan, and that’s often a task that has been delegated to HR. However, more than 90 percent of companies in the United States are small businesses, and are like Kucharski when it comes to succession planning. A joint poll by Harris Interactive for CareerBuilder.com found that nearly 40 percent of companies don’t have a solid plan in place, which presents an opportunity for talent leaders who step forward and take the reins.
Stephen Miles, CEO and founder of The Miles Group, a talent strategy consultancy, refers to paper succession plans as the compliance model for succession. He said HR’s goal should be to move to an operation model and develop a forward-looking skills and experience profile. Talent leaders need to look at the specific job and assess the requirements for critical positions going forward.
“We don’t have crystal balls, and we can’t be perfect,” Miles said. “But human resources professionals can still distill from the strategy some of the core strategic pillars of a specific job, then see how those pillars will change over time.”
Boards often control the highest-level appointments, while talent leaders have traditionally taken charge of the lower- and mid-level succession plans at companies. At the mid-level, companies often encourage a promote-from-within strategy where internal employees apply for advanced positions, said Bob Tenzer, senior vice president of human resources at C3/Customer Content Channels, an outsourced customer management company. Employees tend to advance to positions higher up the ladder after completing a certification process or additional training that makes them better qualified. HR tracks each employee’s progress, and thus can gauge which employees would be the best fit for openings.