Lisa Kopochinski shares some great information about succession planning benefits in this article!
Numerous articles have been published in recent years about succession planning, and the concept has become particularly important since the baby boomer generation (people born in 1946-64) started to retire. While over the years succession planning has gained traction, there are still not enough Canadian association boards and CEOs putting these plans in place.
“Succession planning at the CEO level has not been taken seriously by the vast majority of associations and charities for two main reasons,” says Jack Shand, CMC, CAE and president of Leaderquest, a Mississauga-based consulting firm.
“The first is practical. The non-profit has a relatively small staff complement, and therefore there isn’t the staff available to be developed for more senior positions. The second reason is that boards tend not to be thinking longer term, at least not as much as they may believe they are. Boards are often reluctant to make decisions for future boards.”
How it Works
To understand the importance of succession planning it’s necessary to know how it works. Essentially, succession planning is the process of preparing an organization for its future requirements by developing the knowledge, skills and abilities of employees so they will be ready to occupy key roles in the future if necessary. Ideally, it should occur at all levels in a company and an association.
“Succession planning is a simple concept often married to an integrated, structured process,” explains Bob Ramsay, president of the Motorcycle and Moped Industry Council in Markham, Ontario. “A formal, agreed-upon plan to ensure that if the most senior staff person or a senior director or manager [leaves] the association the board and remaining staff have a step-by-step approach to replace him or her with the goal of the most seamless transition possible.”
Succession planning is not new to the business world. “It has been around since the young caveman bopped the old caveman on the head and led the hunt,” says Ed Barisa, CEO of the Ontario Real Estate Association in Toronto.
It became standard practice in the private sector starting in the 1960s and 70s but is relatively new among many associations.
“All associations, no matter their size, need it because even if their chief staff officer is young, she may leave quite suddenly for a new opportunity somewhere else,” says Barisa.
“Succession plans are not only designed to replace those collecting the gold watch, but all key positions, no matter [the employee’s] age.”
Barisa adds that proper succession planning is just as important as strategic planning because it determines what needs to be done and who within the organization has the right skill set to do it.
Where to Start
So, where does an association begin this sometimes daunting task?
“With a conversation,” continues Barisa. “People asking each other about their retirement plans, identifying potential internal candidates, providing them with targeted development opportunities, challenging projects, etc. In small organizations, usually it involves identifying high-potential individuals in other organizations who could fill the job.”
Shand recommends five basic steps to get started. These include: (1) identifying the key position(s) for which a succession plan is needed; (2) identifying the job requirements to perform effectively in the position—at present and in the foreseeable future; (3) identifying succession candidates who possess most of the requirements and the potential and interest to develop those they do not have; and (4) building the required competencies in the succession candidate, supported by a plan and budget, through various means including training, job shadowing or mentoring.
“The fifth and final piece is to assess progress,” says Shand. “For CEO succession, the board or a board-delegated committee will do this. For other staff, it will be the responsibility of the employee’s supervisor with ultimate responsibility falling to the CEO. All parties need to understand that no one is beholden to follow through on a succession plan with one individual should that person ultimately prove to be incapable or disinterested. This is why communication and evaluation are essential components.”
In addition, Ramsay says that every association should have a formal succession plan, and this will differ depending on the number of staff.
“It must be realistic and tailored to the specific needs of the association and its members,” he says. “The process entails numerous steps including the preparation of a draft process or procedure to be undertaken in such [circumstances]. The draft plan is then reviewed and fine-tuned by the appropriate HR committee or advisors and ultimately presented to the board of directors (or appropriate governing body) of the association for formal approval. The key is that the succession plan is known, understood and accepted as the way forward in these circumstances.”
Key Benefits
Once properly in place, succession plans can be very helpful for associations when they are navigating their next few years. These plans will help deal with the various levels of uncertainty and risk that are part of everyday life for association leaders.
“There is a big cost to change in organizational leadership,” says Shand. “Continuity is disrupted, knowledge of corporate history and culture may be lost, strategic plans lose momentum. Concurrently, members are no less demanding and may not patiently wait for the next CEO to ‘get up to speed.’ Having a known, accomplished and ready leader in the wings may be more advantageous than giving that opportunity to a stranger.”
“As an association executive, the main benefit is a good night’s sleep,” says Ramsay. “Knowing that in an emergency involving me or one of my key staff the association has a plan that can be implemented on a moment’s notice; knowing that the members’ interests are being safeguarded and the staff will be in good hands makes life a lot easier.”
