Succession Planning with Reliable and Effective Tools
Marco Luiz Bruno
Managing Director
Instituto Pieron (Bioss Brazil)
The term “planning” in Succession Planning can be paradoxical. Although the future cannot be planned according to linear logic, one can still make judgements. Interestingly, using our judgment is at the heart of what we do at Bioss to understand current capability, which is a crucial element for identifying an individual’s potential and their likely future growth.
When identifying potential successors, the main dimensions that need to be considered are potential capability (current and future), values and the absence of negative personality traits. Competencies become a relatively unimportant consideration for succession planning, as we do not know which competencies will be required in the distant future, and because competency scoring has a high correlation with current performance. This means that searching for successors through the lens of competencies would limit the result to the identification of professionals who are already ready for the position (i.e. “back-ups”), and discarding those whose capabilities are likely to match the challenges of the role years ahead (medium and long-term successors). Interestingly, any candidate who already possesses the required competencies for the next level up would likely be feeling underutilised.
Potential capability
When we consider a person’s capability, we are referring to their ability to deal with ambiguity, ever-changing variables, uncertainties, gaps in knowledge, and an increasingly abstract environment. The process by which a person judges, that is, the way they combine data, facts, knowledge, intuition, perspectives, feelings and values is not directly observable to others, or even evident to the individual themselves.
Although this capability is not explicit, we can determine an individual’s capability (their current stage of development) using a scientifically proven methodology and the backdrop of recurring themes of complexity (Themes of Work). By extrapolating, we can also predict a person’s likely growth pattern in relation to their capability and the Theme of Work that would create ideal working conditions and engagement in future.
Levels of Work is the only model that offers a substantial scientific basis, models, and tools capable of assessing and individual potential capability and future growth in a language that speaks directly to the growing challenges that organizations constantly must face.
Values
If we look beyond competencies as an identifier of potential successors, enterprises are increasingly seeking clarity on the values and principles that mobilise their people. In fact, values have always been the basis of human action. That is why this interplay must be made explicit.
Values guide our actions, shape our choices, and influence our behaviours. They therefore affect our relationships, leadership style, investment decisions, prioritisation of activities, how we adapt to a variety of situations, our own individuality, and much more.
Organisations that foster a strong culture and perpetuate their strategic intent have a clear sense of their values. The origins of many of the conflicts and difficult relationships between people and departments can be traced back to fundamental divergences in terms of values.
Values are conveyed through interpersonal interactions. People learn and incorporate values through direct contact with each other, observable behaviours, body language, tone of voice, gestures, symbols, and other expressions; in short, by seeing coherence (or incoherence) between what is thought, what is said, and what is done.
A good corporate succession plan will pay special attention to values. People may live and work within organisations for years on end, and succession planning must be a pathway to identifying the people who will be capable of living the values and taking the enterprise forward into the future.
Absence of negative personality traits
This is an important issue. “High potential” people may derail their performance through their personal idiosyncrasies. These can range from merely being “difficult” in their attitudes to deeper-set issues, such as displaying controlling behaviours, paralysis due to fears or insecurities, distrust in others, aggressive reactions, and exaggerated egocentrism, to name a few.
Personality does not fall within the scope of human development programs. While people may learn skills or use tools to help them temper or adapt certain personality traits, one cannot train someone to be more or less “obsessive”, for example.
Negative temperament (personality) traits cannot be ignored, and each person must make the necessary effort to manage these, even if this requires external professional support. If these issues go unaddressed, they tend to become career limiting factors for many people.
Succession planning approaches
Three approaches are generally adopted for succession planning purposes:
- Committees
- External assessment services
- A combination of the two above
1. Committees
For this approach, committees make top-down decisions. Usually, the CEO of a company together with their direct reports form a committee to identify potential successors for the C-suite roles.
This process is mirrored down the organisational structure, from top to bottom. The future CEO is chosen by a committee formed by the board of directors and the CEO themself. Family-owned companies employ a board of directors, hire external consultants, or simply assume that the natural heir will take over to lead the business. These committees, when in place, tend to meet annually and base their decisions about people on criteria such as (to name a few):
- history with the organisation, qualifications, training, performance
- personal attributes, such as energy, effort, experience, behaviours
- alignment with the company’s values
- availability for geographical mobility.
However, what is noticeably absent is the question of a person’s potential. It is widely accepted that potential refers to “how much a person can grow”. But what is potential? What is the construct? How do you predict how much someone can grow and evolve? Which scientific framework can be applied that would enable two evaluators, who may know or not know a candidate, to arrive at a similar view of their potential? These questions tend to be poorly addressed in most succession committees. Consider the common scenario where a person is highly rated in one year and is downgraded to “low potential” in the following cycle. Has their potential changed? If potential is an estimate of future growth, then it stands to reason that it shouldn’t change from year to year.
A common mistake made by committees is failing to clarify the concept of potential. If there is no clear and shared understanding of the concept, we cannot define it; and if we cannot define it, then judgments are just opinions. Hence the practice of annual reviews.
If there is clarity around the concept, views about an individual’s potential could be a key data point for management, and highlight the conditions that need to be created to enable the individual to translate their potential into performance. And what about the annual reviews? Perhaps do these every three to five years (depending on the seniority of the role).
Many organisations like to work with the often misleading “nine box” framework, which brings together two variables: performance and potential. This creates labels such as “high potential-high performance”, “low potential-high performance”, etc. The fact that seems to be forgotten is that, when we talk about potential, it is not necessary to talk about performance. On the contrary, managers who lack a reliable theory about potential often mistake it for performance.
2. Use of external assessment services
At the beginning of this blog, we stated that potential capability is related to one’s ability to see and deal with ambiguity, uncertainty, and inaccuracy. In short, it is about working with goals and moving parts that imply increasing time spans / horizons into the future.
The greater one’s potential, the greater the ability to picture actions and their consequences over time: from short time frames to months, years, and decades. At Bioss, the Themes of Work underpin our consulting approach. One distinctive feature of this approach is the portrayal of the required work themes (levels of complexity) of an organisation and the type of capability people need to be able to effectively deal with each of them.
Furthermore, this approach is backed by long-term research that allows us to predict the likely growth patterns of people’s capability over time. With this data, we can picture an organisation’s talent pool and use it as a tool to effectively assess and manage “human capital”, drawing direct connections with strategic planning.
3. Combination of external assessment services and internal committees
Combining managerial experience and judgement (in the form of committees) and a solid theoretical framework (provided by external assessment services) is an interesting way of bringing it all together, allowing the best balance for talent management decisions. This has been our practice with clients.
By presenting the organisation’s talent pool, based on the Themes of Work approach, managers can compare that information with their own perception and analyses.
As external consultants, one of our main contributions is to provide managers with a solid theoretical basis on which to have conversations around potential capability and limit their tendency to focus too much on aspects of personality, behaviour, and performance. Not that these elements are not important (they are the focus of direct management), but they are distinct from potential. Values and competencies are important, but they should not muddy the water when the specific focus is potential.
The final output
Succession planning should deliver a clear picture of people’s potential capability, drawing connections between that capability and the levels of work required by the organisation, and showing how that capability is expected to grow.
The original versions of this post can be found here.