Dropping the buck

According to experts like Cycan MD Bryan Hattingh, few events in an organisation have as big an impact on a company, both internally and externally, as the departure of a key leader, especially when it`s the MD.

Succession planning is the practice of identifying, mentoring and training key individuals to fill vital positions in an organisation to ensure a smooth transition if such resources resign or change roles.

But finding those competent and skilled individuals may be easier said than done - especially for SMEs, who operate on limited resources.

SME SKILLS WOES

Many local companies are not prepared for this but are aware that they should implement such strategies, he says. According to the recent SME Survey spearheaded by World Wide Worx, 91% of local companies polled indicated that they were aware that access to skills and expertise was important, but they said access to finance remains a hurdle to successfully clinch contracts that require extensive expertise with the resources they currently have.

Additionally, South Africa`s education system does not focus heavily on career planning, goal setting, decision-making and strategic thinking. Individuals leave the education chain qualified and informed and go through life in a reactive, opportunistic way, but because of their talents, intellect and energy, they nevertheless manage to be successful.

So SMEs feel the right leadership skills need to be acquired from outside the company, but find little available. SMEs also tend to use their HR departments as a payroll and admin department, rather than as a succession plan facilitator.

"This doesn`t make life easy for HR professionals who are trying to make a difference in an organisation. They soon discover that they are only a support service that comprises process and procedure, rather than impacting the lives of employees within the company," says Hattingh.

Hattingh says businesses that cannot afford to buy expensive skills must look within their organisations to mentor and develop leadership qualities in current and future employees.

Thea-Mari Franken, HR specialist from Sepane.com, agrees. She says organisations still hold the outdated view that the role of the HR department is to perform the administrative and transactional personnel management functions such as processing payroll, maintaining personnel records and leave management.

"The modern HR practitioner has to be a strategic partner to line management to ensure proactive HR strategies are developed in support of the business objectives. The HR practitioner must act as a coach and mentor to line management to assist them in creating a work environment conducive to sustained, productive behaviour," says Franken.

Are organisations maximising individuals` talents? Are they really in the right place? Do they know why they are there? Do they have defined plans that they are moving towards? In most cases, Hattingh says the answer is no.

Major multinationals and some forward-thinking companies routinely run mentoring projects with succession planning in mind, but many smaller companies neglect this completely, even though they cite it as important.

IT`S NOT JUST ABOUT THE MD

According to Stewart van Graan, MD at Dell South Africa, a company that has mature talent management and succession strategies in place, the days where businesses were very regulated and static and well managed in terms of growth are long gone.

"In a perfect business world, everyone that you hire into your organisation has a growth path to the top, and the most likely candidates are primed for the top key positions. Unfortunately, in the real world, this is not the case. Today, businesses are morphing and changing, service and product lifecycles are shorter and the nature of business is a lot more complex.

"Dealing with change is at the core of succession planning. In today`s business world, business models do change, and management needs to implement a plan that equips people to deal with any changes that occur," he says.

With this in mind, Van Graan says companies should plan for every key position within an organisation.

"A key position could well be a technical resource, right through to the MD. Management has to identify the resource that could continue with the mission, value and objectives that have been set out as the long-term business strategy," he says.

According to Van Graan, succession planning should be at the core of every company`s long-term strategy, and the process should start at the beginning: the prospective employee interview.

"Management has to take a look at the type and number of employees they require to achieve their goals. When a new candidate is required, top management has to be present to ensure only the best are hired for the required positions, and to ensure that the individual will fit in with the well-established company culture and ethos," he says.

Hattingh agrees. He says attracting and retaining talent in business is critical. In many instances in South Africa, there are skills shortages, but even if the skills are there, there is almost always a talent shortage.

"Over and above functional capability, talent brings qualities such as leadership, attitude, cultural fit, values, energisers and passions to the organisation that creates a galvanised force within a business. You simply cannot run a business with disparate individuals. You want people in your company to be expressions of your brand and expressions of the customer promise," emphasises Hattingh.

He says companies should ask prospective and current employees how they think the company`s vision ties into their own personal aspirations and goals, and how it can be met by being part of the organisation.

RIGOROUS TESTING

Hattingh adds the interesting part about measuring potential is that, while companies often think assessing competencies through psychometric testing is sufficient, there are many innovative ways to measure an individual`s talents.

"We have moved into a world where we have an array of instruments and measurements to identify a prospective or current employee`s competencies, motivators, cultural affinities and energisers at a forensic level," says Hattingh.

"These tests form the basis for a very meaningful discussion with an individual, because the testing is not the be-all and end-all. You have to understand the heartbeat of the person behind it," says Hattingh.

Employees are also able to identify their blind spots, self-limiting beliefs, and self-sabotage patterns that are inhibitors to their success. The process also gets companies involved with their employees, and provides a channel to talk and reflect on their tasks, and what they are trying to achieve, both professionally and personally.

BUILDING COMPANY MUSCLE

Hattingh says companies must build a band of people who can have interchangeable roles. Companies should get the key employees to operate across the lines of the business, so that they become familiar with what the processes and nuances are, to avoid survival dependence on one individual. In many cases, MD survival dependence is one of the major risks for small, owner-managed businesses, where they perform key tasks and are pivotal in securing of deals and revenue streams.

"There are many components of a CEO`s job that can be cut-and-dried tasks but, ultimately, it is the softer issues that count, like leadership and perspective. That`s something that isn`t taught. Companies must strive to be in a position to take any one of a number of individuals and put them into the number-one slot if it was required.

"They should be rotated in top spots in some of the business units, because the intellectual horsepower and the ability to learn on the fly makes great leaders and, in turn, great companies," says Hattingh.

Hattingh says another popular method companies employ these days is `muscle-building`, which refers to bringing in talent from outside of the organisation. These people aren`t familiar with the industry the company operates in, but have the integrity, character and vision to see where the company is going. As the individuals learn about the business and go through a transition process, they bring a new perspective into the business.

REDUCING CEO DEPENDENCY

Hattingh believes it`s time for companies to re-engineer and restructure roles within a company - particularly that of the CEO - to reduce dependency. "In effect, the CEO must strive to create a business that is self-perpetuating and sustainable without him. He has a key part to play in building a culture of coaching and mentorship and upliftment throughout the organisation, as well as focusing on company mobility, competitive advantage and sustainable growth. This process requires careful thought, planning and effort, but the payback can be significant."