Newsletter: February 2012
Organizational Success and Succession Readiness: Part 1
Does your organization have a succession program in place? If it doesn’t, and many do not, don’t fret but do take action. (Our next article, part 2 – Building a Succession Program can guide you in exactly what to do.) Too many companies and small businesses default to the practice of reactionary assignment of a successor, amid a now glaring and vacant position, or embark on a swift external hire that often ends up as a high cost disappointment from a ”hiring misfire.” The consequences are not only costly but are also a missed opportunity, due to lack of focus and the inability to support fast growth.
Marshal Goldsmith proposed that succession planning should be called succession development. We agree, as a great plan is worth nothing if not pursued. As we repeatedly say, talent initiatives—and succession planning, as a key element—is a process, not an event. It should be understood as a long-term investment for organizational success and legacy, verses an expense and a management item on a checklist.
A succession strategy is about having an identified plan to fill key positions within your organization. And, a succession program is the implemented process of identifying, developing and transitioning potential successors for the company’s present and future key roles, aligned with the talent and ambition of its current employees and talent network.
A common error that we see in succession planning is to target only the key executive roles (CEO, COO, CFO). We see this as a significant risk unless you are a micro business. For example, if you are in the construction or transportation industry, a logistics manager may be critical for the success of your business. Having a vacancy in this position could quickly result in a decrease in service and an increase in customer complaints, and possibly a decrease in customer retention.
Which is why critical positions across the business need to be identified and replacement processes planned.
Common Arguments and Justifications
In our work with companies, we often see that the president or key executive doesn’t believe there is an immediate need for a succession plan. Their stated arguments are, “we’re too small,” “we’re too new,” “we already have good people in place,” or “I’m not going anywhere soon.” In (an unlikely) static environment where no one leaves, no one gets sick (including the owner or president), growth isn’t that important, and performance is exceptional—these arguments may hold true. But, the reality is that we don’t live in a static business environment. People do leave, they do get sick, the president needs to grow the business, the employees are not all good performers, and some roles are hard to fill.
There is also a tendency to hold on to marginal performers because there is no clear plan on how to replace them. The impact: the business suffers, the executives suffer, employee morale and productivity decreases, and the customers become less than satisfied with their service. And, if customers have other options, they’ll begin to take them.
Another argument we hear is that small businesses do not have the internal talent pool or a large number of employees to choose from when there is a need to either fill a vacancy or identify an employee to lead a growth initiative. While this is a reality for many small businesses, it does not have to be your destiny.
Business plans are filled with hopes and dreams of rapid growth. Yet, they use a lean-on-the-people strategy to support that growth. This is one reason why business plans fail to meet expectations. It is simply unrealistic to assume that businesses can grow and thrive without a clear plan on how to identify, develop, and place people in critical positions to support growth. It has often been said you cannot grow by cutting. And similarly, you cannot sustain your business (for long) with a gap (talent shortage) that endangers the delivery of your promise to your customers.
Four Key Questions to Help You Assess Your Company’s Succession Readiness
- Do you have a people-related plan to support the growth initiatives?
- Do you have current and relevant job descriptions to establish expectations, role clarity and accountability of your workforce/talent?
- Do you have an identified talent pipeline (candidates by talent areas and for your key positions)?
- A process or structure in place for identifying and developing those high-potential, “promising” employees that fills the talent pipeline?
If you do not have the above elements in place, they become challenges and result in:
- Knee jerk replacements—either unsuitable hires or “not ready for prime time” promotions that end poorly due to lack of suitability, development and transition support
- Retention challenges—the best talent leaves to pursue growth and other opportunities as they do not sense an opportunity at your company to advance in alignment with their career aspirations
- Unnecessary costs in crisis recruiting and training
- Disruption to the work culture/environment, meaning that a sense of stress, discord, competition and posturing for position will manifest in employees and could embed in your culture
- No or poor bench strength to deliver, let alone grow
A Note on Rightsizing and Succession Planning
Every business owner/executive should spend time on proactively rightsizing the company. Unfortunately, rightsizing, over the past few years, has taken on a negative connotation. It’s often seen as a euphemism for firing people. Appropriate rightsizing is simply matching the work force with the workload so that the business is supported and grows in a cost-effective manner. It is because a business is not rightsized, as an ongoing operating approach, that it can find itself in the position where it needs to “rightsize” for economic reasons.
An up to date and well-managed succession plan is a prerequisite to rightsizing your company and supporting growth. We see it as a key leadership initiative and responsibility to and for your organization.
In Part 2 next month, we discuss how to help you build and maintain a succession program.
Healthcare Corner
Health Literacy
What is health literacy? According to Health.gov, health literacy is the capacity to obtain, process, and understand basic health information and services needed to make appropriate health care decisions (http://www.health.gov/communication/literacy/).
It includes the ability to understand instructions on prescription drug bottles, appointment slips, medical education brochures, doctor's directions, and consent forms. It includes the ability to negotiate complex health care systems. Health literacy is not simply the ability to read. It requires a complex group of reading, listening, analytical, and decision-making skills. It also requires the ability to apply these skills to health situations (http://nnlm.gov/outreach/consumer/hlthlit.html).
This sounds reasonable. Although, we’re not sure how basic health information is defined nor are we sure how realistic it is for the average person to apply analytical and decision-making skills to health care situations. This information is certainly complex. Even physicians argue and debate about the best care option, and they are trained. How do we reasonably expect the patient and their family members to be able to do what care givers often struggle to do?
But in reality, health literacy involves more. It involves:
- The ability to understand different health insurance offerings and pick the best one, for them and their family
- Be able to accurately predict future health conditions that may impact them and their family members
- Understand treatment options
- Understand where care is best provided:
- Home
- Outpatient
- Hospital
- Long term Care
- Understand legal concepts, such as a Living Will
For example, the maker of Lipitor ran an advertisement that stated “Lipitor reduces the risk of heart attack by 36 percent*” (Creative Destruction of Medicine, Eric Topol). This, on the surface, is very impressive, but the key to understanding the advertised statistic was to read the definition that appeared with the asterisk. What the 36 percent reduction actually meant was, in a large clinical trial, 3 percent of the patients taking a placebo (sugar pill) had a heart attack compared to 2 percent of the patients taking Lipitor. Yes, it was a 36 percent reduction, but not in the way many people would interpret it. It wasn’t 36 less patients out of a 100 getting a heart attack, it was one! The statistics were correct, but you needed to understand the study and what it meant to determine the magnitude of the benefit.
Health literacy is important so we the patient can make more informed decisions about our care, but we must also be realistic on how much information the average person can absorb, analyze, process, and use and how much time they have to acquire this information. Our main point here is to be careful with legislative initiatives that make assumptions that simply are not true.
So what should the average person do?
- Get an advocate and bring them with you to listen dispassionately to the information being presented. It is very difficult to be laying on a bed, in the emergency room, and make an informed decision.
- Ask questions or have your advocate ask questions.
- Use reliable social media sites to learn more about your condition/disease and ask questions. Some examples of social media sites are:
- Government sites such as the National Cancer Institute – http://cancer.gov/
- There are government sponsored sites for other disease conditions
- Mayo Clinic – http://www.mayoclinic.com/
- Patients Like Me hosts patients with any chronic condition – http://www.patientslikeme.com/
- Cure Together – patients report on their conditions –http://curetogether.com/
- Inspire, a site where patients discuss their disease – http://www.inspire.com/
- There are many sites to help you better understand medication side effects and adverse reactions. Just type in “drug side effects” or “adverse drug reactions” into the search bar of your Internet browser.
We do not endorse any of these sites. Our intent is to introduce you to the information about health and disease that is available to you, should you choose to use it.
People need help, they need guidance, and they need informed caregivers. They need advocates, and they need people to help them navigate the care process. Yes, they should be informed – informed enough to ask good questions and know when they are getting good care. Then they need to trust, and that is in the hands of the caregivers.
