The general availability of talent data has turned succession planning into an organization-wide endeavor, said Sayed Sadjady, principal and human capital solutions leader at professional services firm PricewaterhouseCoopers.
Additionally, changes in corporate governance by the Securities and Exchange Commission — most notably new regulations included as part of the Dodd-Frank Act of 2010 — have heightened the focus on leadership succession. The new guidance calls for the adoption and disclosure of detailed CEO succession policies from all public corporations.
Added to the equation is the perceived shortage of skilled talent in certain emerging specialties. Sadjady said these developments have created a cascading effect. Corporate succession planning used to stay focused on the top three layers; now, companies are spending far more time examining critical roles further down the company depth chart.
“It isn’t uncommon that some form of succession planning or different tiers of succession planning takes place for multiple layers of the organization,” he said, “as opposed to just really confined to the executive level.”
And while top-level succession is much more qualitative — there’s greater attention paid to “soft” leadership skills — the further down the organizational ladder, the more hard data is used as a basis for evaluation.
Chris Lennon, director of product management for Chicago-based HR technology firm SilkRoad Technology Inc., likened the new data-driven succession process to fantasy football. HR leaders, much like fans playing fantasy sports, use comprehensive performance and profile data to make decisions — or pick a team.
Over time, as the performance data changes, Lennon said HR leaders might make adjustments to their planning — the outlook for the composition of their team. They aim do this, he said, by tapping both quantitative and qualitative measures, like if an individual is determined to be a flight risk or doesn’t appear to have the soft skills needed to advance.
Lennon said heavy reliance on data in this vein helps eliminate manager bias and emotion in lower-level succession. It also helps open HR leaders’ eyes to employees who may have previously gone unnoticed.
SilkRoad’s performance management system, WingSpan, enables employees, managers and HR leaders alike to enter information in the system.
For instance, employees can input information on if they’re willing to relocate or if they speak secondary languages. Managers can enter information on performance or if they think an individual should be considered a high potential. And HR leaders can use the combination of data points to determine how they might see an individual moving up or across the organization.
“When you allow our customers to search for that specific information for a particular key role, and then bundle it with performance scores, it starts opening up the door and allowing them to see other people in the organization and all the people in the organization that might be decent candidates,” Lennon said.
In addition to integrating large sets of data into a user-friendly interface, HR succession planning technology also taps traditional HR planning tools.
For instance, Halogen Software Inc.’s eSuccession module integrates the use of performance, profile and other employee data with standard HR mapping tools like talent pools and nine-box grids. A talent pool refers to talent managers placing employees in different groups based on their perceived capabilities and readiness for a job. A nine-box grid is a visualization map that allows practitioners to place individuals in different boxes depending on a combination of capabilities and potential.
Potential moves up on the vertical axis. Performance moves right on the horizontal axis. An individual placed in the lower left-hand corner of a nine-box represents someone who is at his or her full potential and is performing below expectations. Someone in the top right-hand corner is a high performer who is also considered to have great potential.
Ravi Puvan, a product manager at Halogen, said the integration of the data, the interface and the concept tools provide practitioners with a one-stop shop for data gathering and analysis. “Our succession planning product is integrated with our development planning, with learning, with our performance module, and it allows for this sort of seamless experience,” he said.
Despite the advantages of these data systems, experts say decision-making should ultimately be calibrated through qualitative characterization.
“It’s not just, ‘Hey, this person has international experience,’” said Tonushree Mondal, North American practice leader for leadership and organization performance at HR consultancy Mercer. “It’s more what kinds of experiences are critical for these roles? Is it that this person needs to have turnaround experience? Is it that they should’ve handled profit and loss, bottom-line growth? So characterizing those experiences and then looking for it in the individual is important.”