Developing a succession plan

How far have pharma companies evolved when it comes to HR practices? Renuka Vembu tries to analyse a single concept, succession planning, to figure out where companies in this industry stand

It is said that success tastes sweeter when shared. In case of organisations, success will sustain and grow only when it is passed on into safe hands, and this is where the seed of succession planning takes its roots. Succession planning, in simplistic terms, would mean creating an able hand that will fill in the gap to be created in the near future. The vacancy could have been created by vidual's resignation, lateral or horizontal job rotation, reIt is said that success tastes sweeter when shared. In case of organisations, success will sustain and grow only when it is passed on into safe hands, and this is where the seed of succession plannan individual's resignation, lateral or horizontal job rotation, retirement, or other unforeseen circumstances. It is not a process that comes into the picture at junior levels, but the idea is conceptualised and practised at the topmost tiers in the chain-in-command. This advance preparation of charting out a plan will save the organisation, as also its people and resources, a great deal of stress and strain as hassles and anarchism are bound to arise out of a crisis situation. Yet, this is an area ignored by many companies, and even if not entirely ignored, certainly given considerably less serious thought and importance than what needs to be given. As Ashok Priyadarshi, General Manager, HR, Alkem Laboratories clearly points out, "In many organisations succession planning is seldom given much thought or consideration until it becomes an apparent need. This can be a very risky approach which can result in of loss of talent and hasty promotions of individuals who are not ready to move up the organisation ladder."

Rajan Dutta, President, HR, Lupin says, "Succession planning is a systematic, well thought and deliberate process of ensuring the availability of highly talented and qualified people, and creating a pipeline for all positions not only in the present time, but also at any point in the future. We follow a talent management based approach, wherein we identify high potential employees in the function, department or SBU, who are leadership material for the future, which lies anywhere between two to five years. These employees are then given developmental inputs through coaching, counselling, mentoring and training, special projects, job enrichment and fast promotions, to groom them to the next level, and for future leadership position."

The vacuum that is created by a person in a particular post needs to be filled out by identifying, assessing, grooming, moulding and nourishing a small set of people who have the requisite skill-sets and portray the desired personality. The end objective is to cement the gap,by preparing the successor for the job role and to chair the seat.

Dr Kashmira Pagdiwalla, Director (HR Operations), Intas Biopharmaceuticals (IBPL), explains, "Succession planning is identifying and preparing employees through mentoring, training and job rotation to step into the higher position in the organisation. Succession planning helps the company take a strategic approach to leadership development, employee skill assessment and perhaps even more important, preserving critical organisational knowledge."

"Succession planning helps the company take a strategic approach to leadership development, employee skill assessment and perhaps even more important, preserving critical organisational knowledge" - Dr Kashmira Pagdiwalla Director (HR Operations) IBPL

"The key impediments that one faces during the succession planning exercise is about the clarity of business and business growth in the long-term, as well as designing the right structure to meet the business plans" - Rajan Dutta President-HR Lupin Limited

Focused objectives

Clearly defined objectives and a road map showing the implementation path takes care of initial hiccups. In IBPL, the objectives for embarking on a succession plan include:

• Active development of long-term prospective successors by ensuring their career growth and analysing work, responsibilities, skills and knowledge required for the future.
• Audit the 'talent pool' of the organisation which will help in allocation of responsibilities and development strategies and fill the identified talent gaps.
• Build a 'key talent resource' of employees who share key skills, knowledge, experiences and values seen as important to the future of the organisation.

Priyadarshi opines, "A succession plan clearly sets out the factors to be taken into account and the process to be followed in relation to retaining or replacing the person for smooth continuation and success of a business which depends greatly on availability of competent people. It also provides maximum flexibility in lateral movement moves and ensures that as individuals achieve greater seniority, their management skills broaden and become generalised in relation to organisational objectives."

Notable benefits

Any scheme holds value and will fulfil its stake only when benefits substantially outweigh investments incu-rred. Lupin undertakes succession planning to cash in on the following benefits:

• To ensure business continuity in the event of any exigencies.
• To create a pool of talented employees to fill in key positions.
• Retention tool for high potential employees.
• To identify ongoing needs for leaders, and design appr-opriate training and employee development programs.
• An important tool to support the organisation's strategic plan and thus contribute to the ongoing business strategies.
• To ensure that the organisation has full access to the intellectual capital of their employees.

Impediments

No initiation comes without its share of hindrances. While resources at the company's disposal, and people's attitude and mindset holds the key, there are a host of other interlinked factors, both when viewing the larger mechanism and also while peeping into the minute detailed versions. Datta elaborates, "The key impediments that one faces during the succession planning exercise is about the clarity of business and business growth in the long-term, as well as designing the right structure to meet the business plans. Linked to that is the proper planning of talent requirement and the right talent acquisition and talent development for the future. It is also about the management team's commitment to invest time, energy and resource in development of the existing potential employees."

Priyadarshi says, "Initially, the potential problem associated with use of succession planning was talent drain and difficulties associated with managing large amounts of human resources information. Now, the larger issue is leadership development, tracking, and developmental opportunities. The real key in succession management is to create a match between the organisation's future needs and the aspirations of individuals. The only way to keep talented people is to provide them with growth opportunities that keep them stretching and finding more promising opportunities they might find elsewhere. Hence we focus more on assessment centers, interviews, tests, performance appraisal process to help us make accurate leadership placement and development decision. This adds on creating talent pool. We go with a mindset for inevitable leadership change by identifying the leadership need before beginning a search. Our succession process includes deploying a succession management process, identifying a talent pool, engaging future leaders, monitoring and assessing the program."

Key elements

In Lupin, every formal initiative is exercised on well defined and clearly articulated framework in order to avoid any sort of ambiguity. The succession planning memorandum is categorised into the following slots:

• Organisation structure: A well-defined organisation structure clearly details down the line of business process, flow of authority, power and responsibility, available growth opportunities and absolute clarity on the number of key positions across the hierarchy. What emerges from the above is role clarity for each position, the value of that job (job evaluation) and the key competencies needed to effectively execute the role. In absence of this, it would be extremely difficult to conduct succession-planning process firmly.
• Business plan/strategy: Growth drives aspirations of individuals, and at the same time, it suggests the opportunities that are likely to come up in the future (one to three years) and hence lays the platform for succession planning and career planning for high potential employees.
• People inventory: It is important and imperative to scan and identify the most likely candidates that can execute the role. Organisational people inventory would reflect the kind of people, in terms of their strengths, areas of development and potential to move up to the higher role. The decision is clear—build or buy.

IBPL listed the following pointers succinctly that will help the company steer clear on the route to succession planning:

• Develop a communication strategy
• Identify expected vacancies
• Determine critical positions
• Determine current and future competencies for posit-ions
• Develop a recruitment strategy
• Create assessment and selection tools
• Supplement HR functions to include active recruiting and staffing
• Identify gaps in current employee and candidate competency levels
• Develop individual development plans for employees
• Extend and implement coaching and mentoring programmes
• Assist with leadership transition and development
• Develop an evaluation plan for succession management

Conclusion

Any programme undertaken has to be beneficial to all parties involved—the company as well as its employees, clients, and stakeholders. If the company gains a fair advantage, and if that reward trickles down to its employees, the rest of the larger team is automatically taken care of. As Dutta puts it, "To employees it would mean alignment of an individual's aspirations to the organisation and their commitment to performance, effectiveness, motivation and stay in the organisation." The end point for every single strategy embarked upon is to percolate and expand its base across multiple layers.

Dr Pagdiwalla lists the necessities to derive the 'ripple effect' of a successful succession planning project on the company and its 'human capital':

• Internal leadership and executive education: Organisations have formal internal programs in place that focus on the further development of employees including the top-tier executives.
• Development plans and courses: Organisations also use a mix of individual development plans wherein they look closely at employees' career preferences and try to match their interests and career development to a future job within the company. Performance management and 360 degree feedback are linked throughout the succession management process and are the main tools used by organisations to place employees into development plans.
• Measuring long-term success: Developing leadership talent is a long-term investment. Tracking the progress of individual participants is a necessary dimension of a best practice succession process.

In a nutshell, she says, "The extent to which an organisation has pursued succession planning has a direct impact on overall organisational awareness and adoption of a succession planning strategy. This in turn, helps establish and reinforce the 'development' culture or mindset that organisations strive to achieve. With succession planning, emphasis should be on organisational growth evolution and future requirements and not on replacement."

renuka.vembu@expressindia.com