Who Will Run Your Company?
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Estimate Software- Printing software that helps you find the hidden treasure in your business.

Who Will Run Your Company?

Who will be your next CEO?

By Johnny Duncan

Companies are constantly striving to stay up with current technology and beneficial trends within the sign industry. Succession planning is a giant step toward keeping in line with that goal. Succession planning allows for creative development of personnel to "fit" within the organization in the event of middle and upper management leaving the agency. It also generates a host of side benefits. These benefits include an increased sense of security for all members of the department, improved morale, better support from line employees, and greater involvement in organizational issues from all personnel. Implementing a succession plan is important to the health of an organization and ensures its future viability.

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  • Why A Succession Plan Now?
    On April 3, 1996, a U.S. delegation of business executives led by Commerce Secretary Ron Brown was en route to Dubrovnik, Croatia, when its plane crashed into a hillside during a storm killing all aboard. On that plane was Barry Conrad, chairman and chief executive officer of the Barrington Group. The Barrington Group was a seven-month old international resort management firm based in Miami. The company lawyer was named acting president, but according to the company’s advertising manager, Conrad was the "brains of the company" (Caudron, 1996). His company had no succession plan and the company is still searching today to find someone to fill his shoes.

    There were twelve other companies that lost high-ranking executives on that plane, including AT&T, Bechtel Corporation, Asea Brown & Boveri and Parsons Corporation. It may seem unlikely for this type of tragedy to ever affect your management team, but other events may have the same impact on your organization due to the nature of your occupation. Succession planning should be more of a consideration in your field to continue with the needed leadership without interruptions.

    Many organizations engage in the process of identifying and preparing employees to fill other positions in the organization. Planning for middle and upper level positions is becoming increasingly more important for companies for several reasons. One reason is the concern with replacing the retiring leaders who have been with the organization for twenty to thirty years. These people who are leaving are taking with them a wealth of experience and talent that could be passed to the next up-and-coming leader (Executive Knowledge Works, 1988).

    Another reason why succession planning is needed is because of the fast pace of change within the sign industry. To keep up with the change, company leaders need to be looking at what kind of person will fill the management needs of the future. With technology changing rapidly and with constantly developing, innovative ways to provide products and services, organizations must initiate a plan to ensure that people are developed for future leadership.

    The last reason why succession planning in the different levels of management is needed is because of a fear and reality of losing people. The job market is very favorable for the employee right now. Good, quality employees have many options open to them, and to keep these employees, a company needs to have a succession or career development plan in place to serve as an incentive to retain them. All these reasons for succession planning drive many organizations to create a plan that allows for development of people.

    Succession planning includes assessment and career development. It focuses on the career development needs of replacement candidates for managerial jobs. At your organization, the development needs of your employees may have been given a great deal of attention, but the career development needs may not have. You may have a number of people who are willing to learn and develop through the proper training and take over the management positions. Now is the time to put the recommended model of career succession planning in place and begin developing your own people to lead you into the future.

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    Examples of Succession Planning
    Succession planning is perceived differently today than in the past. Today organizations are inclined toward a more stringent planning procedure. According to the Conference Board’s HR Executive Review, a 108-member survey reveals the new attitude in succession planning: The survey found that 93% of respondents either currently have a formal, companywide program or are moving in that direction (Flynn, 1995). Many companies today have come to the realization that eventually the current leadership is going to leave the organization and someone will have to take over. It may as well be someone who is equipped with the skills and knowledge infused by the company through a succession plan.

    Some smaller companies have felt the need for a successor. When the family-owned business begins to run out of family members to take over the helm, the need for a successor becomes urgent. An example is M.H. Zeigler & Sons, Inc., a wholesaler of apple-based products and lemonade, which began a succession plan in early 1990. The plan was to turn over the operations of the company from the elder Zeiglers to six members of the new generation. While the plan involved a five-year process, most of the planning and implementation was from the bottom up. The younger generation developed a succession plan that included "gifts assessment" of other family members. The "gift assessment" evaluated the family members’ strengths, weaknesses, goals, and their "fit" with the company. The younger Zeiglers then developed a plan to organize the company into more sharply defined departments; they also furnished job descriptions that made accountability and responsibilities clear (Nelton, 1995).

    Another organization that used assessment of personnel’s strengths and weaknesses is the Baxter Healthcare Corporation. Immediately following the merger of Baxter-Travenol Laboratories and American Hospital Supply Corporation to become Baxter Healthcare Corporation, the company began what they called an Executive Development Review. The process brought together the executive management team for two days of consensus management designed to evaluate employees. The employees were evaluated in the category of strengths, development needs, next likely position, promotability rating for next position, and long term potential (5-7 years). This process assisted Baxter Healthcare Corporation in developing a succession plan that included an executive development review process, performance management objectives, and a performance appraisal system (Executive Knowledge Works [EKW], 1988).

    American Greetings Corporation, based in Cleveland, Ohio, also has a succession-planning process in place that focuses on executive development. The process looks at the competencies that make people effective in both their future and current jobs. A four-person team that includes the CEO, president, and the staff director make up the executive-development committee. The committee is charged with identifying high-potential candidates for the company’s top three levels of management (Caudron, 1996). The importance of identifying high-potential candidates and their competencies, is one of the vital first steps in this succession planning process. These are determined by multi-source assessments and performance reviews. Where there are gaps in the needed competencies, the Human Resource or Training Department will provide the necessary development tools to improve the candidate’s knowledge and skills.

    American Greetings accommodates the individual’s goals also. American Greetings’ main focus is to make these high-potential employees perform more effectively. Then, if the employee has aspirations of moving up in the organization, the company helps the employee develop these, too. The company is concerned with developing a pool of qualified leaders, and this provides the flexibility necessary to meet changing business challenges.

    At American Greetings, the company strives to give ownership of the succession plan to line management. The executive committee lays out the foundation for the succession plan, and decides what positions need to be filled in a three to five year time frame. But, it is the line management people who implement and perform the process. Senior staff will set the requirements, line management will actually do the developing and grooming, and the Human Resource department acts as a facilitator and consultant.

    The City of Altamonte Springs, Florida, has recently implemented a program for City employees called P.R.I.M.E.. The acronym stands for Professional Reinforcement of Innovative Management Experience (Frazee, 1999). It is a program designed to enhance the current training programs and provide a foundation for succession planning and career development. It was developed out of necessity, because in three years the Altamonte Springs Fire Department will have seventeen employees retiring. Ten of those are in middle management. With only sixty employees, the loss of these managers is devastating. The goal of the P.R.I.M.E. program is to serve as a succession plan and provide the needed replacement managers in the three-year time period.

    The P.R.I.M.E. program is open to all city employees; however, the candidate must be recommended by a supervisor and only a select few are chosen. Members of the Altamonte Springs Fire Department participate in this program and are now in line for future management openings.

    Recommended Approach
    The recommended model for succession planning for your organization is one that incorporates aspects of several different existing plans used in other organizations. The main areas of focus for your company is going to depend on the attributes of your existing personnel, the goals of your organization (company mission statement), and the time frame you have to work under. In any case, the succession planning process should begin with a commitment from your management team. It is only with their direction and urging that a program such as this can be established. It is important to emphasize to all employees the reasons behind the succession plan. All disincentives that exist must be identified and eliminated to encourage people to accept promotions or assume leadership.

    The next step is to target the potential individuals to be successors. Some employees are more qualified in terms of gifts, traits, and experience than others and deserve leadership positions. You should target those individuals who possess the technical, management, and administrative skills and competencies required for the job. The "grooming" process cannot begin until you are confident you have selected the right person to develop. Communicating with the potential successor is also crucial. He or she has to be willing to put forth the time and effort and accept the responsibilities that accompany the development process.

    Finally, your carefully constructed career development program should be implemented to give the chosen successor the training he or she needs to be equipped for a new role. The required training (on-the-job or educational courses) should provide the chosen individual(s) with all the tools they will need to aid in career development. Follow-up is needed every step of the way to provide accountability for the successor. The succession plan will not be effective if there are no checks in place to see the progress and measure the results. Some of the checks could include a simple measurement of the knowledge and skills acquired in the career development program. Paper and pencil testing or simulations could provide measurable follow-up.

    One final note: No one wants to be set up for failure. This would not only hurt the individual, but harm the organization as well. The individual needs to be coached and given the support he or she may need to succeed. Coaching is not just a inspirational pep-talk, but a continual pursuit of perfection for the targeted individual. A commitment from management to provide the needed support for the successor must be established before the process of succession planning can begin.

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