Organization Survival
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Literature Review
The primary objective of any organization is survival (Adewale, Abolaji & Kolade, 2011). That is inclusive, but not limited to talent retention, turnover rate, career development, supervisor's support, organizational conflicts and nepotism (ibid). This survival objective has everything to do with succession planning. Business entities have to go on despite the death or exit of their key leaders. The successors can be family members or outsiders. Whether an organization opts for a family member or an outsider, it needs to work out an effective succession plan. This plan should not be an afterthought but should be part of the business establishment. Any company that fails to put in place a successive useful program puts its operations in jeopardy.
The backbone of an organization's functioning and survival are the people. They determine service and product delivery by the company. Proper human resource management and efficient process management helps organizations achieve more and focuses on strategies that drive success and competitive advantage of a company (Avanesh, 2011). Employee management programs aimed at getting the best out of employees have become the focus of many businesses. Investment on employee development should go hand in hand with ensuring that measures are there to ensure that the company gets returns on the investment on the employees (Barner, 2011).
There is a need for companies to develop effective and efficient workers' management programs that allow them to share information and skills, which will enable development of the company's capacity for human resource (Carter, Goldsmith & Ulrich, 2012). There are more benefits to being achieved with an expanded human resource capability. That comes regarding performance. One way of achieving this is succession planning which will enable the company retain skills and build human resource capacity for the business regardless of its size (Dai, DeMeuse & King, 2011).
There is a notable failure by many organizations in Singapore to address the issue of succession planning. This lack of planning presents a challenge when any position in the organization falls vacant due to organizational size and structure (Sullivan, 2012). It is pertinent for organizations to develop interventions that are geared towards ensuring that its mission, services, and successes are not impeded even when key people in the organization at any one time leave. The failure of many of these organizations to put up effective succession plans can in some way be attributed to the attitudes of the executives of the companies. Their ego does not allow them to think for once that someone can take up their positions. That, therefore, presents a challenge to succession planning since these leaders in many instances fail to include an exit plan as part of their company strategy. For those companies that are family owned, the potential successors may at times not be imparted with the necessary skills and competencies to run the business. Therefore, in many cases, these businesses end up closing at the death of their founders.
The Singaporean situation is typical for many states and hence using it as a case study will give a clear picture of the situation all over the world. It is important to note that many companies have failed to set up an elaborate succession plan. Many companies, even in those countries where there is knowledge about the need for succession planning fail to put in place a succession plan. The leaders in these companies may acknowledge the need for a successive plan, but fail to put it into action. Therefore, implementation process becomes a problem in developing a succession strategy for companies from the onset. That has meant that these companies respond to succession as a crisis.
The demand by mid-sized companies for expertise in senior management for continued operations experienced an economic boom cannot be ignored (Sullivan, 2012). When proper intervention measures are put in place, it is possible for these organizations to accommodate change without necessarily experiencing failure due to leadership changes. Stakeholders in companies should understand that turnover of employees including those in the primary positions is bound to happen. The company's operations need not be stalled when key people leave the company for any reason at all. The mission of the company must continue to be achieved despite these transitions. For this to happen, proper succession plans are needed to enable these companies reach their visions and continue with their missions even in the absence of founding leaders. Every successful leadership should progress the company further and make it better than it was before. The administration should ensure that the company continues enjoying a competitive advantage over its competitors and adapts to the current market needs.
Turnover of employees whether through retirement or a transfer resulting from crisis exposes companies to continuous recruitment (Almutairi, et al., 2012). There is a need for enterprises to maintain skills through efficient processes that are aimed at reducing the loss of knowledge. Employees need to be motivated against leaving their firms (Avanesh, 2011). The battle for succession rages on in the public service; just the same, companies should set trends to contain workforce and top skills or face dire consequences. There is a need for midsize companies to normalize succession in line with the changes that are taking place and the progress that the company needs to make.
The role of mid-sized companies as key drivers of the economy should be taken into consideration when considering interventions for succession planning. If operations of these enterprises stall in any way, there is no doubt that the economy will feel a crunch. It is, therefore, critical that mid-sized companies develop well-structured succession planning to ensure stability and sustainability. That can be attained through established processes and development of talent (Sullivan, 2012). In targeting the role of these companies in the economic development, the strategic plans of these companies should be geared towards growth. This increase should work in tandem with the growth of the country's economy. However, any slackening in the growth of a country's economy should not stall the growth of the company. The company's systems should be such that they can insulate the company against external factors.
Organizations ought to identify available means and ways where developmental interventions are developed with an aim to undertake the organization's mission. Interventions for succession planning should have in mind growth and career training of employees throughout their existence (Brodbeck & Crawshaw, 2011). The knowledge acquired in designing intervention measures should be used to ensure the stability of the operations of the organization despite its leadership and challenges it faces including turnover of its principal people (Brodbeck & Crawshaw, 2011). In this regard, planners need towards ensuring that the company's existence goes beyond the individuals to being self-sustaining. Anyone joining the ranks of leadership should only make the systems better rather than make them dependent on him or her. The decisions of individual leaders and successors should be determined by the policies put in place by the company instead of the systems depending on personal decisions. That is because the company may have to go through turmoil in every transition stage since a change in leadership would translate into a change of the working systems of the enterprise. The only caution that should be taken here is that the systems should be set in such a way that they are flexible to the dynamics of the market such that the market dynamics do not at all interfere with the operations of the company. A company should be able to adapt to any changes in the market without having to slow down on progress. Its growth should be sustainable at all events.
For effective and efficient succession to take place there is need by businesses to determine which employees have the highest potential of filling key positions and make them ready for that opportunity when it arises. Employee development initiatives ensure that companies expand the scope of availability of knowledge and skills for the identified employees to be able to take up roles when a position falls vacant. There should be a continuous initiative aimed at ensuring that the leadership and competency needs of the company are met and that a vacuum is not created in any of the service requirements of the enterprise (Carter, Goldsmith & Ulrich, 2012).
The continuous development process requires developmental interventions throughout the process that involves different learning processes and robust actions that are aimed at building up identified employees. These interventions should address different capabilities over the time and ensure that employees grasp every aspect of the organization and the position (Elkin, Smith & Zang, 2012). It should be noted that different companies would respond differently to succession needs depending on their needs. Developmental remedies for succession in medium sized companies require a wider scope of work revolving around the studies developed and the trends within the agencies (Fink & Hagreaves, 2012).
Continuity of the mission, services and success of the company in its lifetime of an operation is determined by the succession planning process put in place in case a holder of any position quits. Midsized companies face constant challenges that make them demand expertise to operate their services and gain a competitive advantage over their rivals (Rothwell, 2010). These challenges include remuneration of top officials that may create an imbalance that makes many attracted to those positions within the organization. Midsize companies may have difficulties in paying the senior staff attractively hence making them prone to poaching by bigger companies leaving them with a vacuum (Rajagopalan & Zhang, 2010).
There is a tendency by many owners of companies to concentrate on how to make their businesses viable or wind up in case the company underperforms. There are those who lean towards family succession especially for that family run businesses in case one or more of the senior members of the company retire from service (Conover, Ebbers & Samuels, 2010). The unfortunate thing is that most of these companies fail to establish mentorship programs for their prospective successors. This failure presents a challenge to the progress of the company in the transition process. It should be understood that succession is comprehensive and continuous process that requires much planning and learning to ensure prospective successors are well trained to take up positions (Elkin, Smith & Zang, 2012).
Planning early for succession ensures that relevant knowledge and skills are imparted to prospective leaders. The successors in those companies where prior planning has taken place can grow with time and the processes within the company and hence become competent managers, or rather, leaders in the company. The problem with mid-size companies is that they lack such programs that allow potential leaders to grow. As such, most of these companies end up losing focus and the competitive advantage. That, in turn, makes the encounter company losses and faces the threat of closing down. New leadership roles are at times disruptive and hence make it hard for the workers to keep up with the processes within the company (Carter, Goldsmith & Ulrich, 2012).
Time is of the essence in succession planning. It does take long and, therefore, there is a need for developmental interventions that will ensure progress. No chance should be lost on what should be exploited for the smooth operation of the business. These response processes are essential in ensuring that every step of the planned process is active and that the activities of the company continue even as improvements are made. Whether the company opts for internal, external or selling the stake I the business, the owners of the company should work towards strategies that will ensure the business will continue to operate despite the exit of senior staff (Festing, Schefer & Scullion, 2013).
Clarity of approach in succession planning is crucial. Crew (2010) is the view that strategy is important for midsize companies just as it is for large companies. It helps ensure that direction is provided in the succession of the company. Succession planning process should ensure that there is flexibility in improving measures and standards within them to avert the status quo. That is something that lacks in many mid-size companies and those who have it require developmental initiatives in place to ensure that the process is not rigid.
Current global trends in business dictate that businesses have ways for creation, innovation and alteration of processes to keep up with the rapid criteria of doing business. Management of a company's talent and human capital remains the most critical aspect of any business (Sullivan, 2012). Evolving business environment calls for evolution in the management of human capital and the talent in innovative and transformative ways that will enable the business to fit the external standards while at the same time improving internal processes (Berger & Berger, 2010). The situation in Singapore has seen not only the companies taking up succession planning but also the government. The Singaporean government stresses the need for preparedness for smooth transition in different levels. The mid-size companies should avoid disruptions and the losses associated with them. That can be done by retaining critical competencies within the organization to ensure the survival and the progress of the business.
The success of mid-size companies is vital to the economy of Singapore. This achievement will be determined by how practical skills and competencies are passed on to the new generations by the senior staff. There is a push by the government for succession planning that allows smooth transition by those exchanging roles. That is exemplified in the way state officials take up positions from their predecessors (Conover, Ebbers & Samuels, 2010). That points to a commitment by the government to proper successive planning due to the role it plays in the economy.
Staff participation is of the essence in succession planning. Staff that is going to take future roles in the company needs to be made aware of the processes and those activities of the company. Companies must focus on the overall human resource, so talent acquisition takes place from the first contact between the person and the company (Berger & Berger, 2010). Financial handicaps put mid-size companies in a precarious position. They must ensure that employees that obtained through the recruitment process have the desired talents and capabilities and can fit the company's competency needs (Pennel, 2010).
Management of skills and competencies as well as nurturing them to meet the needs of the organization means overcoming talent acquisition challenge (Carccary & Whelan, 2011). Hiring and maintaining of employees is a paramount process in the life of business. The company needs to identify the right people for the job. If a company does not get people who meet the needs of the industry, there is the likelihood of that company being phased out of business (Rajagopalan & Zhang, 2010).
Workforce planning looks at utilization and development of human resources (Adewale, Abolaji & Kolade, 2011). Human resource needs of the company need to be considered comprehensively. It should include motivation, succession and training needs of the company. Consideration in this area will form affecting needs planning of the total human resource needs of a company. Workforce planning forms an essential part of succession planning. Projection of the human resource requirements is important when formulating the strategic goals of the company. Current and future human resource needs take center stage in formulating an effective succession plan (Ballinger, Lehman & Schoorman, 2010). There should be a match between human resource planning and the organizational needs of the company. Workforce development processes should be directed towards meeting and improving the effectiveness and efficiency of the company.
Midsize companies are left with few options when it comes to developing employees from within. They face greater challenges dealing with the turnover of senior employees who leave the company in search of greener pastures. There are times companies will take their employees for granted exposing them to the keen eye of the competitors who pick the best from them. Failure to develop and nurture talents and competencies will mean that companies are always engaged in the process of recruitment to fill positions that fall vacant (Berger & Berger, 2010). Succession planning ensures that vacant positions are filled with competent people who can quickly take up the roles without disrupting the operations of the company.
Dai, De Meuse & King (2011) suggest succession planning seriously, if a company needs to retain the best employees and maintain the capacity to nurture the existing workforce. A good succession planning process will ensure that initiatives are there to maintain skills and competencies in the workforce are working and that the given incentives will be developed through the interventions put in place (Almutari, et al., 2012). Continuity of the company should be the focus of the succession planners.
Succession planners should view the business entity as a different entity from the entrepreneur. Business should not be considered as an extension of their owners (Burke, 2016). That is important in a family business where succession is given into the hands of a family member. It should be understood that those family members who take over the business have the core competencies to run the business and take it to the next level. Burke (2016) identifies five principal stages of a succession planning.
In the first stage, which he refers to as the proactive succession planning, entrepreneurs, develop a business case that includes succession planning (Burke, 2016). The business model should have a clear vision, mission, culture and values of the company. From the onset of the firm, there are clear and elaborate structures and systems that will stand the test of time. These structures should be able to last beyond the current and successive leaderships. Therefore, such business structures should espouse a self-running business model that will ensure that transitions will be smooth and that they will not interfere with the operations of the company.
In the second stage, which Burke identifies as identification of target roles and positions, critical workforce segments within the company are identified. This identification focuses on the achievement of the objectives of the company in all stages rather than just filling current positions. The areas identified should have the ability to drive the growth of the company in all stages. Strategic planning therefore should lean towards only not meeting the current needs of the company but also the future needs. The terms of service for any worker should be in line with the mission and vision of the company. This mission and vision of the company should forecast trends that are likely to affect the business operations in the future and set appropriate intervention measures to accomplish the mission of the company rather than just focusing on the current needs of the company.
The third stage is concerned with the determination of core competencies and skills. This step is aimed at determining performance gaps. It is very useful in the recruitment process where talents required to meet the strategic goals and key objectives of the company are addressed. Even members of the family would have to acquire the necessary competencies that will enable them to help the company to achieve its objectives. The human resource department is well equipped with what to look for while looking for people to fill key positions in the company. Employees training form a vital part of developing and retaining these core competencies. There is need to train employees to take up the challenges they are running to face in the day-to-day operations of the company. The training should envision the successors of the current leadership.
In the fourth stage, successors are identified. Development and implementation of rigorous, competency-based performance management processes take place now. Potential successors are identified within the organization, although not limiting the company to focus on internal succession only. A selection process for external candidates who are qualified is established. These external successors are given competent workers who know the inside working of the company so that there is a smooth transition. External succession focuses on injecting fresh ideas to complement the operations of the business rather than interfering with them.
The fifth stage is about leadership development. Leadership development programs are set. These programs take into consideration the current and required training and development practices. Mentorship programs form part of the leadership development programs. This stage is aimed at ensuring that sufficient development opportunities are availed on a regular basis. In-service training forms part of the leadership development process. These programs identify potential successors to the leadership of the company and prepare them for any eventuality. The process ensures that existing employees can work with the new leadership efficiently and smoothly in case an external successor.
Several successive planning model theories have suggested. One of these is Scharmer's U model, which observes that the top management team should embrace and act to implement succession planning. He views succession planning as beginning from the immediate future. The theory supports a concept of U process, which consists of five movements that make change possible (Scharmer, 2007). The first movement in business Scharmer refers to as co-initiating. The organization establishes a common purpose with all the stakeholders about a future event. Everyone in the company should be involved in succession planning process.
The second stage in this model he refers to as co-sensing. The company sees the need at hand as a whole in all spheres. New ideas are put in place and innovation occurs through a collective input. The stakeholders of the company give room to changes by welcoming new ideas in the running of the company. Innovative ways of doing business are sought, and this becomes the work of every person and not necessarily the work of the chief executive officer alone.
The third stage Scharmer refers to as presencing. It involves forecasting and here the leadership sees the company in the future they want in place for the company. A foundation is laid for change that sets up the company to the expected end. Unresolved past issues are let go and focus put on realistic future goals. It is at this point the future needs of the company are envisioned and worked on. Succession plans are made with this future in mind, and potential successors can be identified at this stage by focusing on skills and competencies necessary to steer the company towards the desired end (Ballinger & Marcel, 2010).
The fourth stage, which is co-creating, looks at what the future model of the organization will be. Scharmer suggests that the leadership should make succession planning a long-term concept and not immediate requirements. Strategies to identify potential successors that will ensure sustainable and dynamic succession plan are put on the plane. This process involves looking into the qualifications of potential replacements.
The fifth stage is referred to a coevolving and includes strategies that are aimed at helping the organization to embrace change and implement succession-planning strategies in the context of an emerging future. Continuity is achieved through collective work rather than making of unilateral decisions by the leadership of the company. The views of everybody are considered in developing a succession plan for the company.
Still another model has been suggested to explain succession planning. That is Santorin's relay succession planning. In this model, the chief executive officer of an organization is supposed to pass the baton to a successor over an extended period. Research shows that those companies that have adopted this model were observed to perform better because successors were exposed to corporate challenges and were able to deal with such challenges before the succession stage. The successor also receives the baton during the tenure of the current chief executive officer and, therefore, receives training hence giving the replacement the much-needed experience. The model is however not suitable for those companies seeking an external successor. Even though the external successor will have the benefit of bringing new ideas to the business, they may not have an opportunity to work with the current leadership of the organization.