Quite often, we assume that every successful endeavour will see the next generation of leaders and hopefully remain a success into the future. However, it is common to observe that as soon as the personality identified with the organisation becomes absent, due to death or any illness of critical nature, the business steeps, and fails to survive into the future.  

While many reasons are adduced for such situations, the fundamental explanation has been traced to the question: "Did the Founder and Owner of the organisation desire that it continues after he or she passes on or become unable to lead effectively?"  

On the basis of this poser, you are able to identify, consider and relate with organisations that, perceivably, have strong future and sustainable leadership.  

Succession Planning is always discussed from the perspective of leadership and indeed had been defined severally with reference to leadership. For the purpose of this discourse, I am taking it beyond, or rather besides, leadership so we can appreciate more of what goes into the process of succession planning.  

It Starts with the Visionary 

Two young visionaries were in a conversation about the businesses they just launched. One, Bruno, was introducing a clothing brand and, the other, Adeline, launched an "everything food" brand.  

"I have done this so that my family can become the name in every household when it comes to what they wear and of course, my children can have a place of employment when they graduate", Bruno said to Adeline. In response, Adeline retorted "Why would you think that far? You know how challenging it is to run a business in this part of the world. I am positioning in such a way that if the line of food supplies my company is involved in now becomes challenged, we can move to another line within the food industry."  

Succession Planning is a process that identifies leadership gaps within organisations and provides solutions to ensure continuity and success.  

The process begins in the mind, and the interaction between Bruno and Adeline can evidently show which of them can successfully undertake and conclude succession planning.  

However, it is still likely that Adeline would later learn about succession planning and embrace it in her business though what resides in the foundation of the organisations would become the determinant of the future.  

One can say that Bruno was deliberate about applying succession planning to his business and this is what we have seen with companies that are 100 years and more, even when the leadership have gone beyond family members.  

When there was little or no thought about succession planning, like in the case of Adeline, the experiences around the Founder and Managers would often be pensive, even as the business was doing well.  

At such times, consultants are brought in to attempt to sell the merits of succession planning while there might be executives in the audience that will argue that the organisation achieved significant success without it.  

This is where the visionary needs to reiterate that he or she desires that the organisation and the business should outlive him or her, thus setting the tone for the next line of actions. 

The Challenges of Succession Planning and Suggested Remedial Actions 

Whether, like Bruno, the Founder and Owner of the organisation, shared his or her vision with other business leaders, the challenges of going through the process of succession planning are oftentimes the same as there are for organisations that did not share their visions. There are several challenges but let us deal with these few:  

1. Inadequate Vision Sharing Sessions

It is common to find visionaries sharing their visions with the early set of their employees during the take off stage of the life of the organisation. However, as the organisation thrives and successes are recorded, the communication about the vision lessens and becomes weak. Without a system to sustain the vision sharing by visionaries, the organisation loses the momentum of the message and fails to ensure it reaches the last mile. This situation can be remedied by using available technologies to record the messages of the visionaries, then replay them for every new class of employees and older ones that need refreshing.  

2. Irregular Capacity Building Programmes for Employees 

Many organisations have highly qualified persons in key positions that can match their industry peers, however, they falter easily when it comes to presenting and discussing their organisation in unison.  

This is attributed to the trend where individuals seek opportunities to develop themselves while the organisations that employed them no longer have in-house sessions for promoting the ethos of these organisations. Indeed, most organisations only have Performance Review Meetings where there is little time to discuss the organisations and their visions.  

The low capacity of employees to readily discuss the visions of their organisations, in unison, remain one of the biggest challenges of succession planning.  

To remedy this situation and ensure employees, especially top business leaders in organisations sustain the capacity to maintain shared visions, organisations must redesign the appraisal of employees at top level and maintain in-house leadership programs that emphasise the ethos of these organisations. Going for external programmes at Business Schools is good but the spirit of organisations towards succession planning are not captured well there.  

3. Poor Response to Unforeseen Circumstances 

Some organisations have become the trend setters in their sector and the economy while others are left wondering what happened and when those things happened. This continues to be the pattern of markets.  

Notwithstanding where your organisation is, it is your response to unforeseen circumstances that will distinguish you from the pack.  

Many years ago, a leading construction company lost its Chairman and two Directors in a plane crash but has continued to operate strongly in the sector because it did not take long for the organisation to activate its succession plan put in place shortly before the incident.  

How many organisations are in a position to survive such devastating blows and still maintain leadership positions in their sectors? Reflecting on this for a moment would reveal that our financial sector players in particular are challenged, and in some cases, the larger economy may be impacted. Succession planning is not just about having vacant positions and getting people to fill them. The unseen and unspoken impact of non-monetary benefits like insurance for senior executives form part of current discourse on succession planning by Human Resources Professionals.  

With Post COVID-19, it is becoming more acceptable to top executives for their organisations to provide Directors and Officers Liability Insurance, Health Insurance, Travel Insurance and Group Life Assurance as required by the Pensions Reforms Act 2014 in Nigeria. These various types of insurance are available, affordable and accessible, not only to address risks bordering on professional misdemeanours but also where critical illnesses arise as we have seen lately.  

The Dimensions of Succession Planning 

It is important to appreciate that succession planning is very unique to organisations that implement the process effectively.  

As mentioned earlier, based on what we have seen recently, succession planning goes beyond leadership and some dimensions have already been identified.  

First, ownership succession planning involves the process where the founders and owners of organisations seek to keep it in the family. Again, reference to our Bruno, he would have identified and groomed the children that will take over from him and this takes years.  

Second is, management succession planning which entails simply identifying and grooming executives who could function effectively as managers, commonly referred to as the "engine room of the organisation". Executives that can get the job done rather than look around for others to do it are at this level. Sometimes, finding effective managers to succeed successful ones can be herculean if not well planned in organisations.  

Next is, and this is emerging with digitisation, product succession planning where organisations known for certain products have to plan for their succession in the market to retain their market shares.  

This has been more evident in the technology and telecommunications sector where products drive the market and not just leadership of organisations.  

Insurance professionals who have become capable of predicting the markets rather than, traditionally, studying events to understand the basis of underwriting have to consider these dimensions of succession planning going forward. Changes with respect to what happens in different organisations based on these dimensions can impact the relationships between insurers and clients, and costs insurers more than they experienced previously.  

Last line 

Succession planning is becoming an automated process especially with Artificial Intelligence, which predicts human behaviours and interests.  

Organisations that will dominate their sectors into the future will have to embrace digitised succession planning, which is more objective and strengthens the process of decision-making across organisations. 

Credit:

The post Succession Planning:  Business Sustainability in a Digital Era first appeared in the Chartered Insurance Institute of Nigeria Journal published in June 2022 

Download Here – CIIN Journal – June 2022