Leadership Succession Planning Reasons and Solutions in Software Organizations
Abstract There is acute shortage of leadership gap in software organizations. This is preventing software companies in developing the potential leaders to remain in changing business environment. As a result, it is becoming important that a company develops a proactive succession plan for key leadership positions at all levels within the company.
Henri Fayol in his Fourteen Principles of Management believed that if that if succession plan is ignored, ill-prepared people would fill key positions in the company. In The Leadership Gap, Weiss and Molinaro state that succession planning is about embedding the value of leadership within the corporate culture and developing leaders at all levels of the organization for a competitive advantage. To ensure strong company succession, an organization needs to strategically plan for key staff to be primed to assume leadership positions within the company. The company leaders help to mould their organization strategic direction, mentor employees, build teams, and guide employees towards delivering quality work and value. However, there is a gap in many companies between desired company performance and actual company results and this can be attributed, to a lack of succession planning for future company leadership. Introduction IT industry will experience an exodus of senior leadership as they approach retirement eligibility. This results in a huge loss of valuable knowledge and leadership at software companies. According to the survey, by 2008 that software industry would lose up to 45 percent of their workforce to retirement. Retirement trends indicate that their senior leadership has higher retirement eligibility rates than the general workforce. To preserve institutional knowledge, maintain future leadership, and prevent shortages in software industry, some software companies begun to look at succession planning as the best solutions to the overcome this problem. Succession planning is a strategy of workforce planning that allows management to prepare promising employees to fill future leadership roles in critical positions. According to the Commonwealth of Pennsylvania uccession planning is an ongoing process that identifies necessary competencies, then works to assess, develop, and retain a talent pool of employees in order to ensure a continuity of leadership for all critical positions.? A succession plan provides a step-by-step guide for maintaining a strong talent pool of skilled employees. The purpose is to achieve the company mission and workforce planning initiatives. The activities identified in the succession plan are methods used for skill and leadership development, knowledge transfer (i.e. coaching or mentoring), or methods used to attract and retain promising staff (i.e. bonuses or tuition assistance). Many software companies are not placing enough emphasis on cultivating the next generation of leaders that will be required to sustain competitive advantage and business continuity. The software companies have historically promoted employees into leadership roles without thoroughly evaluating the true capabilities of these individuals. Possessing a technical skill has been the basic reason for promotion. However, technical skill does not always translate into leadership ability. Many of these talented individuals drown in their new roles largely due to the lack of leadership training. Conversely, many internally qualified employees are overlooked for promotional opportunities because top-level administrators are often unaware of the encompassing organizational talent. Externally recruited leaders are often hired to fill the management vacancies. This sometimes causes aspiring leadership candidates to become disgruntled and eventually leave the organization. Demands on the recruitment and retention of skilled Software professionals are increasing and more emphasis is being placed on leadership development and succession planning. As the war for talent continues to intensify, software companies are being forced to evaluate ways to scan the organizational environment for the next generation of leaders and to develop succession-planning programs that assure the continuity of long-term corporate success. One of the biggest challenges facing software companies is the idea of succession planning and management, since it need to develop and maintain a pipeline of leadership for their systems after the Baby Boomers have long since retired. Reasons for lack of succession management 1. Flat organizational structure and limited number of positions limits the types of available opportunities to develop successor candidates 2. Organizational size limits the size of the talent pool from which to choose possible successors 3. Smaller organization and training budget limits the amount of dedicated resources available for succession management or leadership development activities 4. Managers?busy schedules and absence of accountability and incentives lead to a lack of focus and awareness regarding the urgency of succession management 5. 35 to 44 year olds 15% decline over the next 15 years 6. An increased mobility of the workforce 7. A lack of sufficiently skilled employees who are ready to move into available key positions. 8. The failure of traditional succession plans to identify and supply a range of well-trained leaders for various positions 9. Responsibility for finding and developing great leaders 10. Accountability for the quality of leadership 11. Willingness to hire-in at all levels 12. A constant search for new talent 13. An acceleration of development opportunities for top talent 14. Identification of High Potential Employees 16. Appropriate Development Opportunities 17. Explicit Support and Accountability for Development 18. Measurement of Worth Solutions to Succession crisis 1. Engaging the Executives: The most important practice of all is to obtain the engagement of top leaders and managers. Their commitment means that the program will be highly regarded, aligned with corporate strategy and focused on the right business issues. The executive and senior executive teams are instrumental in defining the deficiencies and identifying the critical content and topics that are the key to successful leadership within the organization. Senior leaders work closely with program participants to create individual development plans and help them select the top two priorities for action learning. Senior leaders continue to meet with participants to coach and monitor progress on action learning throughout the year. 2. Competency based Succession Planning: Successful leadership development programs are based on identified leadership competencies. By isolating and agreeing upon leadership competencies most important to your business, you will have the foundation for leadership development, as well as succession planning, career development and other talent-related processes. For example Infosys Technologies Ltd. (Infosys) is a global player in the IT services industry. Infosys has set up the Infosys Leadership Institute (ILI) for identifying high performers in the organization and giving them opportunity in improving the performance of the organization as potential leaders of the organization. Candidates for the leadership program are chosen based on past performance and assessment of leadership potential. ILI interventions are based on a ine Pillar?leadership development model. Nine interventions comprise 360-degree feedback, developmental assignments; Infosys culture workshops, developmental relationships cheap coach purses, leadership skill training, feedback intensive programs, system process learning, community empathy and action learning. a. 360-degree feedbacks help to evaluate employee critical leadership competencies. b. Developmental assignments help in gaining cross functional experience and developing practical leadership skills c. Culture workshops make sure that the basis of the culture and values of the organization is well ingrained in the newly developing leaders. d. Developmental relationships help in associating a mentor relationship with a leader of the organization. e. Leadership skills training focuses on imparting organizationally relevant leadership skills by veteran leaders of the organization. f. Feedback intensive programs are behavioral interventions based on informal and formal feedbacks from the experiences that the candidate has from the individuals with whom he/she interfaces. g. System process learning aims at giving a holistic picture about the organization as one system and sensitizes about improving the system as a whole. h. Action learning provides opportunities for hands on experience in improving relevant and live organizational problems. i. candidates to enrol for community development programs. Example 2: Wipro, another major leader in the IT services has developed ife Cycle Stage Development Program? Here the employees who are identified to have high leadership talent are given training according to their level in the organization. The major programs are the ntry level program? ew leader program? ipro leader program? usiness leaders program?and trategic leaders program? a. Entry-level program aims at building leadership capabilities in entry-level high performers. b. The ew Leader?program is for building people leaders of future. c. Wipro leaders program targets high performers in the middle level of the organization. d. usiness Leader Program?aims at building competencies of the employees who have potential of building/ managing business units. e. The trategic Leader Program?aims at building top management leaders for future. Wipro leadership development is based on their vision of having leadership in terms of business, customer, people and brand. Wipro has identified competency based on leadership qualities. The critical competencies are based on rigorous interviews, focussed groups and critical incidents. The competencies required for top management, at Wipro are customer orientation, strategic thinking, problem solving, self confidence, global thinking and acting, commitment to excellence, aggressive commitments and building star performers and teams. 360-degree feedback is used to assess the leaders on the basis of Wipro Leadership Qualities. Based on the feedback, Wipro identifies the slack areas for development in each of the individuals. Training programs are organized and the leader is asked to formulate his own plan for development. Leadership development at Wipro has high degree of support from the top management. Even the CEO, Mr Azim Premji participates in the leadership development activities (Bakshi, 2001). A study by Hewitt Associates ranks Wipro Limited as number one in Asia Pacific in terms of leadership development (Hewitt Associates coach shoes, Press Release, Dec 3, 2003). 3. Aligning with business strategy: Organizations such as Agilent, Aetna and Cisco focus heavily on company-specific business strategies in their leadership programs. Furthermore, leadership development programs must be included in business conversations and planning. For example, Example:GE India GE in India has a mix of general management fast track leadership development and functional leaders development program. These have a mix of classroom and experiential learning. The GE financial management program, Human Resource Leadership Program and Information Management Leadership program are the three stated career development interventions. The first two programs aim at building functional leaders while the third one is a general management program, which aims at building fast track leaders. Potential leaders are selected based on qualifications and competencies and are given extensive cross-functional training. 4. Targeting all levels of leadership: Effective leadership development isn about training individuals. Its primary objective should be the development of a leadership team capable of moving a company forward and meeting key strategic objectives. To do this, every layer of management has to be equally prepared. 5. Applying a comprehensive learning approach: No sound leadership development program consists solely of an instructor-led training event. Programs must include developmental assignments, 360-degree assessments, and meetings with global counterparts, case studies coach outlet online, external education and a wide variety of e-learning and other media to give leaders a complete experience. People learn to lead by doing, so the best leadership development programs focus heavily on experiential learning. 6. Integrating with talent management: To build a sustainable leadership pipeline, organizations must identify successors to existing leaders and place these individuals into the right development programs as part of the company regular business practices. In fact, one of the biggest indicators of a first-class leadership development program is a set of established practices and a corporate culture that encourages development throughout the enterprise. At Textron, talent management processes are integrated as follows: Performance Management he performance management process not only looks at what employees need to get their jobs done, but also allows individuals to plan their careers. Succession Planning ?Succession planning at Textron is a process that naturally feeds into the identification, assessment and development of its leaders. The potential of leaders against long-term strategies is assessed and appropriate developmental plans are put into action. Recruitment and Selection ?Talent assessments are reviewed through a centralized sourcing and recruitment function which enable the company to identify candidates and ensure a strategic fit, ensure high potential people are moved frequently across businesses and functions, and align talent selection with Textron's core leadership competencies. Software for succession planning Superior succession planning software enhances business performance Workforce goes through the inevitable changes of turnover, promotion and reorganization; it's essential to fill each position with the top candidates. But hiring can be an extremely time-consuming process with long cycles. In order to maintain continuity, it's advisable to plan ahead of time for possible successors to your key employees. Succession planning software can help. A robust software application will help you assess the needs of your organization, identify places where you lack the talent you need and identify potential internal and external hires. The right planning solution will enable you to maintain a succession strategy that simultaneously protects the needs of the organization and helps build the careers of your valued employees. And it will inform your new leadership initiatives with constant insight into your bench strength. Authoria Succession Authoria Succession?is an industry-leading solution for delivering a superior workforce. Authoria planning software offers an electronic iling cabinet?of up-to-date, accurate and searchable talent data that can be accessed by HR leaders throughout your organization. Leadership development tools help you identify the leadership potential of top performers in your organization, and plan for their growth with succession timelines and scenarios. The benefits of Authoria's succession planning software Make sure the right people are in the right positions at the right time Identify talent gaps and needs now and for the future Build stronger bench strength for key positions Help managers to develop leaders within the organization Identify potential leaders and top performers early in their careers ISuccession iSuccession is an effective web-based software module, designed to empower your organization with time saving tools to produce the critical information you need, when you need it, for succession planning. iSuccession Gives Your Organization the Ability to: Identify and track high potentials and high performers Manage all employee talent data to position Track employee skills, competencies and interests through an employee-centric approach Match talent to positions company-wide Generate accurate talent pools Reduce paper processing Produce bench strength graphs and reports Minimize data duplication with globally shared access Technology Features Cost-effective No software to install, all web-based Easily integrates into present HR information system Easy to customize and configure Quick and easy implementation Secure login account controls iSuccession Screen Sample Benefits Enables you to retain skilled talent Reduces vulnerability to talent shortages Increases visibility of bench strength Increases employee engagement Allows for smooth transition in critical roles Enhances company brand HRTalentPro HRTalentPro offers a low cost, highly effective On-Line Talent Management Software that provides: Centralize talent management data Track progress Manage individuals and different groups Assess critical skills and conduct gap analysis Identify development needs Manage the Performance Review Process Conduct talent review discussions with our 12 Box Model Identify and retain the top talent in your industry and improve the quality of your workforce Summary Succession planning is not a silo. Companies of all sizes and in all industries must reevaluate how succession planning fits within their enterprises. In order to take advantage of new opportunities, avoid the looming talent crisis, and mitigate the risk of untimely departures, companies must extend succession planning across their organizations and fully integrate succession planning into their broader talent ecosystems. This can best be achieved by designing a proper progression and succession process now will create a solid team of talent ready to receive the baton in the challenging labor market ahead. References 1. Nurturing Fast Track Leaders ?A Concept Paper BY Sandeep K.Krishnan AND Prof Biju Varkkey 2. http://www.insala.com/succession-planning-tools.asp 3. http://www.authoria.com/cp/succession-planning-software 4. http://bersin.wordpress.com/2008/01/26/leadership-development-the-six-best-practices/. 5. Succession planning and leadership development: Critical business strategies for health organizations by Sandra K. Collins, MBA and Kevin S. Collins. 6. http://www.hrtalentpro.com/
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