The terms “succession planning” and “middle manager” seldom find each other in the same sentence. As for many corporations, succession planning remains a back-of-the-envelope exercise, prepared hastily by a firm’s board of directors outlining potential C-suite replacements in the heat of an unplanned departure.
Such a situation is representative of how the old view of succession planning is known — with only the very top batch of leaders garnering attention, and with very little thorough planning taking place.
Nevertheless, while the broader history of succession planning has dealt with only those primed to take a top job, more organizations are putting stock in devising more detailed succession plans for the middle ranks, according to human resources experts.
“Succession planning is critical at the midlevel,” said Justine Staub, director of workforce development at propane supplier AmeriGas Propane Inc. “These managers are the foundation that the business is built on. Even the best CEO can’t build a successful business with weak midlevel managers supporting them.”
There are three critical reasons why talent managers should lookbeyond the C-suite in developinga succession plan, as well as important details to consider when approaching succession at this level.
It Plans for the Long View
Tomorrow’s top organizational leaders are today’s midlevel managers. As a result, not building a solid plan for their succession will leave talent leaders with a gap. In a 2014 case study, nonprofit business research and benchmarking firm APQC found that companies with the deepest leadership benches conduct succession planning well below the executive level.
“Companies who saw midlevel succession as a best practice really differentiated their ability to develop strong leaders and were less impacted by leadership shortages than companies who didn’t have such plans,” said Elissa Tucker, research program manager at APQC, outlining the study’s findings.
Part of the reason for this, Tucker said, is the leadership qualities valued in today’s business environment are more dynamic. Specifically, the importance of so-called “soft” leadership skills — like emotional intelligence and compassion — have driven companies to take more intentional efforts to trainfuture leaders with these skills early and often.
Talent ID: Midlevel Managers vs. C-Suite
As talent managers work on succession planning, oneimportant criterion is to understand the differencebetween what makes an effective middle manager vs. what makes an effective C-level executive.
Middle managers need to be influencers, prepared to showcase soft skills to manage a team. They also need to understand client or customer needs and have in-depth organizational knowledge.
At the executive level, it’s more critical that candidates are strong general managers with hard skills and have strong operational experience and expertise.
By making efforts to build leadership skills beyond a firm’s most senior leaders, the larger succession planning scope is poised to expand to the middle level. “Succession planning today becomes not just about planning for the C-suite or executive team,” Tucker said, “but about planning for other organizational leadership roles as well.”
Others say putting the succession spotlight on the middle of an organization helps propel current business strategy while stocking a deep bench for the future.
“We need midlevel leaders who are the ‘make it happen’ people who operationalize the executive agenda,” said Jim Gillece, chief people officer and senior vice president of human capital management at AlliedBarton Security Services, a provider of security officers. “Clearly defining success at this level becomes the foundation of a sound talent and succession strategy.”
It Harnesses the Knowledge Center
Including the middle level in succession planning is also important because it taps one of a company’s most valuable assets: its intellectual capital.
“CEOs may have financial knowledge, but that middle person knows the recipe, and they likely know your customer very well,” said Brooke Pollard, an employment attorney at Tredway, Lumsdaine & Doyle in Irvine, California.
Cynthia Walter, president of Phoenix-based HR consulting and benefits firm MW Bagnall Co., said she is seeing more clients implement plans at the middle level, including at her own firm.
“We take a good, hard look at these midlevel managers,” she said, “because they do so much and have so much knowledge. We try to get what we need from them when they’re in their current role. We need them to document processes, change workflows to make them more efficient if someone new comes in.”
It Fuels Retention
Prioritizing midlevel succession is also a way to retain high-potential employees.
“Succession planning at the midlevel is more of a business strategy in terms of retention,” Walter said. “It makes clients and internal employees feel more secure. But beyond that it’s also a great way to incentivize current employees.”
“Employees in the mid-ranks aren’t often privy to broader organizational strategy, so having a concrete succession plan is a great way to empower them, give them greater visibility and access as they become part of your leadership pipeline, and ultimately retain them by moving them into progressively more senior roles,” she added.
APQC’s research shows the biggest reason employees leave is for better development and career advancement opportunities. By implementing more performance opportunities to employees at the midlevel, talent managers can identify employees who may have potential to enter the midlevel management ranks.
“Our study shows that driving companies to be interested in doing lower-level succession planning is a way to focus on retaining workers,” APQC’s Tucker said.
Walter said at Bagnall, succession and retention go hand in hand. “We give midlevel employees chances to get more skin in the game by getting industry designations or certifications and give them other opportunities to start thinking outside of their box and seeing advancement opportunities.”
Talent managers should also think of ways to formalize these strategies so succession and retention worktogether. “We want their input and feedback,” Walter said. “For example, our quarterly ‘I Innovate’ program givesevery employee a chance to offer up an idea for making something better or more efficient at our company. Everyone is welcome to participate, and it’s a great way to getmidlevel employees engaged, and give them exposure.”
Similarly, AlliedBarton uses midlevel succession planning to fuel retention. “In 2013, we enhanced our talent management program by adding ‘The Chairman’s Challenge,’ ” Gillece said. “Created by our chairman and CEO, it’s designed to fully engage high-potential employees. Our CEO devotes one week a month to meet with teams that have been identified as top talent. The primary focus is to facilitate a ‘call to action’ to address service and business challenges and to streamline our processes and becoming more efficient.”
Including midlevel managers in the broader organizational succession framework also exposes senior leaders to employees that otherwise may not have appeared on their radar.
“When we see companies doing succession planning for middle managers or midlevel executives, what’s great is senior leaders get involved in that experience and get visibility into how potential successors work,” said Josh Brand, senior director of global delivery for Harvard Business Publishing, the publishing affiliate of Harvard Business School.
Most important, these opportunities give senior leadership a chance to evaluate midlevel employees in situations they don’t typically get to observe them in. Silos are broken down, senior leaders are given visibility into talent beyond their own business unit or region, and employees are motivated and engaged.
Important Elements for Midlevel Succession
Once talent managers have bought into the notion that midlevel succession is worthwhile, every midlevel succession plan should contain the following elements.
Have quantifiable metrics. One of the most important elements of any succession plan is having a process in place for evaluating when an individual contributor is ready for a management role.
“Many organizations, including SAP, have traditionally promoted people who are good at what they do,” said Pamela Seplow, global head of career and talent management at business enterprise software giant SAP. “But that doesn’t necessarily make them good leaders.”
As a result, SAP recently moved to develop a set of defined leadership principles — “drive simplicity, develop amazing talent and ensure customer success” — that would help them better evaluate when and how employees are ready to become middle managers.
So how can talent managers evaluate when employees are ready to fulfill a leadership role?
“The evaluation process includes participation in a multi-rater assessment linked to our leadership principles or participation in simulations of everyday leadership decisions to see how someone thinks,” Seplow said. “Additionally, there is a core leadership development program offered to those who are interested or have been identified to move into a first-time management role.”
For some employers, defining competencies and evaluation of potential managers starts as early as the hiring process.
“At Bagnall, we use a tool called ‘Performance Resources,’ which is a two-hour online assessment that benchmarks personality against potential roles and evaluates strengths and weaknesses,” Walter said. “As we’re thinking about transitioning employees to different roles throughout their lifecycle with us — including midlevel succession — we can pull results and map them to talent assessments and reviews that they’ve had while they’ve been with us.”
At AlliedBarton, the litmus test of whether an employee is ready to be considered for a management role is tied directly to the performance evaluation process. “Our leaders are evaluated through meetings with local senior operations, HR and sales leadership,” Gillece said. “Leaders are then assessed using a nine-box grid that’s measured against the competencies in our organizational leadership model.”
Leaders at all levels are then evaluated on their results as well as what potential they may have to either expand in their current role or take on a higher level role. “Our goal with this exercise is to identify and track our ready-now leaders so we can move swiftly when vacancies arise,” Gillece said.
Make your succession plan transparent. Most succession planning experts agree it’s prudent to make any succession planning transparent to employees.
Even directly asking employees how they feel about being in a management succession pipeline is critical. “We ask every employee in the company to identify their preferred next move,” Gillece said. “This is to ensure that the employees’ career goals and ambitions are considered and known as managers begin to think about succession planning for their teams.”
AlliedBarton plans to take that transparency a step further in 2015. “Our goal this year is to begin to build visible ‘career maps’ for every role within the company,” Gillece said. “Part of our strategy to ensure we have ready-now leaders is to make sure that there is a clear path to achieve their goals.”
Making succession planning transparent also reinforces the notion that midlevel succession can fuel retention and engagement. “We don’t hide that we have a succession management approach or what it is,” SAP’s Seplow said. “We encourage leaders to have open discussions with those that are in our succession pipeline.”
Still, transparency in succession planning is only effective if the company properly communicates it to its workforce.
“We find about half of our clients communicate their midlevel succession plans and about half don’t,” Harvard’s Brand said. “Once you share that there is a future plan for high performers to ascend within the organization, others quickly get wind of it. In some organizations, that’s a positive thing. In others, it may not be. So you have to weigh that and think about the impact on your specific culture.”
Define what roles need a succession plan. As talent managers work with specific business units and hiring managers, they may find that some are more receptive to building midlevel succession plans than others.
At SAP, Seplow’s strategy is to let divisional leaders guide this conversation in determining where succession plans are needed. “We focus on business units where there is an appetite to do succession planning,” Seplow said. “In some areas, this is not a priority, so we don’t force them to do it.”
What roles typically make the most sense to focus on for midlevel succession?
According to Brand, think about growth and risk first. “Think about those midlevel roles where if someone leaves they really put the business at risk,” Brand said. “For example, someone who has a key role in a division that’s been targeted as high growth or an emerging market that is expected to contribute a lot of revenue in the coming months. A departure like this leaves the company exposed if they leave. That’s a role that you likely want a succession plan for.”
The same thinking applies for roles that might have compliance-related tasks or those who report into someone like a finance manager of a divisional unit. “You really want to look at the management role under the CFO and other key finance roles at the midlevel and have a strong succession plan for those roles,” Brand said. “If someone like that leaves, you need to have identified someone internally who is ready to jump in right away. This isn’t the kind of role you want to go to a headhunter for.”