Succession Planning - The Key to Success

Economic uncertainty coupled with a skills shortage and high unemployment are some of the challenges currently facing companies of all sizes across South Africa. The appointment of key business leadership positions is often overlooked until short-term challenges arise, leading to a chaotic scramble to find the most suitable candidate. The failure to implement a long-term strategy negatively effects the development of feeder groups throughout the entire leadership pipeline.

While some companies have raised concerns about using executive development practices with the primary fear being that individuals mentored to take on senior management positions may be headhunted by rival firms. The bigger picture, however, indicates the benefits offset the potential risk and training individuals for senior roles, regardless of whether they remain with the company offering the mentorship or not, boosts South Africa’s currently limited corporate talent pool. Successful companies, such as Hunter Hotels, identify key personnel early in their employment and meet regularly to identify and fulfil the training needs required to develop these employees throughout their ascent through the company’s ranks.

Africa experiences continual issues regarding political and economic uncertainty which can often lead to the appointment of individuals with a proven track record and executives who have weathered storms in the past. The concern is that, by constantly employing from a narrow talent pool, the development of a broader executive talent pipeline is overlooked. This aggravates the ‘talent paradox’ that is already posing a serious challenge to many South African companies. Unemployment is high but skills are in short supply, resulting in the appointment of leaders who are high performers but not high potentials. Often, succession has been a purely paper-based exercise with little done to actively identify if earmarked individuals have the capacity to take on key leadership roles.

Early this year, Tourism Deputy Minister, Tokozile Xasa, launched an Executive Development Programme aimed at rectifying the skewed socio-economic landscape of the tourism sector by enabling black women managers within the sector to develop the skills necessary to take them to the next leadership level. The initiative began in reaction to an independent study conducted in 2011 which revealed a very low percentage of women in executive management positions. The finding indicated a scarcity of black women employees with the required experience, qualifications and skills profile for such high-end positions. The programme is focused on developing the skills of women already in junior and middle management positions to prepare them for promotion.

Succession planning goes hand in hand with executive development and planning and requires a balance between the forecasted skills that will be required in forthcoming years while keeping an eye on the original vision of the company. If the leaders of the future do not share the primary vision, the shape and direction of the company’s growth will lack consistency and threaten the fundamental basis of the company’s development. A company’s “bench strength” indicates the capabilities and preparedness of key employees identified to take over senior positions and research suggests that companies enjoying the rewards of succession planning show a high level of participation from the CEO, alongside the engagement of the entire leadership team.

The benefits of a well-executed succession plan are considerable and it plays a key role in the firm’s longevity and future success.