Over the past few weeks we’ve discussed various aspects of strategic planning, including clearly identifying the target market segment, focusing on what your company needs to do to win, establishing measures of success, and implementing management processes to develop, drive, and monitor action plans. Now, let’s turn our attention to the most important part of a strategic plan—talent.
Too often, talent is treated as an afterthought. According to a survey in “Talent Imperative” conducted for Forbes Insights, fewer than 1 in 10 executives from midsized private companies say their talent strategies are intimately aligned with overall strategic planning. This can be a critical mistake, considering people will execute on the strategic plan.
Retaining Talent and Building Your Bench
Are you prepared if your executive leaders or star players exit your organization today? Or would that put you in a leadership crisis?
Identifying top talent and succession planning are not topics that many organizations address in a systematic way. In a recent benchmarking survey conducted by the Conference Board, 44 percent of companies reported that developing top talent to support their organizational goals was the greatest challenge they would face in the next 12 months.[i] Start-ups and emerging companies are small and nimble, focused on raising cash, driving revenue and meeting payroll. Not high on their priority list is what to do if the sales leader suddenly left or where to find the next software developer.
This thinking can be shortsighted and expensive. The cost of replacing the sudden departure of key talent is usually two times their annual salary.[ii] This is a reason to be prepared! Strategic talent management is about aligning talent to the business strategy, knowing the critical skillsets required in the industry, selecting the right people for the job, developing your key players, setting stretch goals and building your bench.
The Keys to a Successful Succession Plan
A good succession plan answers these questions:
- Do you know what roles are most critical to the organization? Can you describe what success looks like in these roles?
- Have you identified potential successors for each of your critical roles and for all of your senior leadership roles?
- Do you have a plan in place to develop, engage, and groom your successors?
Starting with your critical roles (roles that have a direct impact on revenue and the continued development of your competitive advantage) allows you to plan and prepare for the unexpected moves, and gives you the ability to strategically place your top talent where you need it as your business landscape changes and shifts.
For each role, there are six key steps for success:
- Identify skills required in the role today and over time;
- Identify development opportunities that will continue to challenge and grow skills required in the role;
- Identify people in the organization that will be a good fit to step into the role today, in one to two years, and in three to five years;
- Find out what motivates your top talent by holding stay interviews;
- Put a plan in place to retain and develop that talent, and
- Actively manage your succession and talent plans and hold your leaders accountable at all levels.
Companies need to make a concerted effort to proactively identify and work to satisfy the needs of their critical talent. By implementing standard, consistent processes and focusing on the few, leaders can retain key talent and ensure successful business continuity in the midst of change.
[i] The Conference Board Inc (2012). The 2011 Success Management Conference keynotes report. [Web log post] Retrieved from The Conference Board. AON Hewitt: Best in Class Succession Management.
[ii] Merhar, C. (2016, Feb. 4). Employee Retention: The Real Cost of Losing an Employee. [Web log post] Retrieved from Zane Benefits; Millar, B. (2013, April 24). Essential Tools of Talent Management. [Web log post] Retrieved from Forbes; AON Hewitt (2012). Consulting Performance, Reward and Talent. Best in Class Succession Management: Who Will Take the Baton? Retrieved from AON Hewitt.>