K&H’s succession planning model – Income and Share Ownership Planning (ISOP) – is based on passing ownership to employees and/or family members.
Succession planning can be defined more broadly to encompass any passing of ownership or management from one person or group to another.
I recently came across a very useful website with lots of information and resources relating to succession planning, as broadly defined, but which is very relevant to ISOP-type situations.
Here’s a summary of the ten key steps, according to the people at Halogen Software (a US company, so forgive the jargon and Americanisms, which I have tried to eliminate or translate where I can, as well as editing out a lot of the detail, which you can see on their website – see link at the end):
1. A first step for any systematic succession effort is to clarify the current owners’ expectations and preferences for a succession program.
2. Establish competency models by talent pool considering the positions that will be fed by that pool. A competency model is a narrative description of the knowledge, skills, attitudes, and other abilities that lead to exemplary performance. Competency models provide blueprints of the talent to build at present and in the future.
3. Conduct assessment of all individuals against the competencies required for success in an organization.
4. Establish (or reengineer) an organisational performance management system. One fact of life is that individuals are seldom eligible for promotion, advancement, or other developmental opportunities if they are not performing successfully in their current jobs. Individuals must thus be measured, as objectively as possible, against the performance expectations for their current level of responsibility.
5. Assess individual potential for success at higher levels of responsibility.
6. Establish a means of regular, ongoing individual development planning.
7. Implement individual development plans (IDPs)
8. Establish a “talent inventory”. Increasingly, decision-makers must be able to find the organisation’s talent on short notice. To that end, they must have information about the pools of talent that the organisation is developing and has readily on tap so that teams can be marshalled on short notice to fight fires, seize opportunities, outdraw competitors, and fill vacancies.
9. Establish accountability for the systematic succession planning effort. Individuals—and their bosses—must be held accountable, for cultivating their talents over time and closing developmental gaps. Otherwise, individual development plans will not be realized. Often, financial incentives for talent development can help.
10. Evaluate the results of the systematic succession planning effort. Often, the time-to-fill metric is a key measure of success. How long does it take to fill positions with qualified applicants?
My thanks to the people at Halogen Software whose website has some great succession planning material for inspiring much of the content of this blog- see Halogen Software