Feature

Why succession planning is critical for clients

Renuka Vembu digs deep into the much talked about succession plan strategies adopted by companies, now increasingly endorsed by clients as well

A lot has already been said and written about succession planning. Its benefits and limitations, its success quotient on the rise of a practical implementation scenario, or the lack of it thereof, from the organizational focus to the employee perspective, have all been covered in depth. Now, let us divert the line of thinking a bit, and look at it from the eyes of one of the other crucial members—the clients. Why do client organizations insist that their vendors put up a formidable succession planning strategy in place? How does it impact them, and what role do they play in charting out a plan, and thereafter during its adoption and execution stages?

Need for a plan

Succession planning needs a very evolved system in place and absolute commitment from the management to make it possible. Vikram Karayi, Senior Vice-president, HR, Xansa, articulated, “On an organizational level, it is important to initiate succession planning right from the beginning as it takes a substantial period of time and investment to groom and develop key specialist candidates, within the available talent pool. Senior leaders take ownership for the creation of such talent pools of candidates with superior leadership potential. This process ensures that our best people are in the right positions at the most critical times. Succession planning not only saves on hiring costs, but also on the training costs for the new incumbent. A careful and considered plan of action ensures the least possible disruption to the person’s current responsibilities and therefore the organization’s effectiveness.”

Kishor Bhalerao, Vice-president, HR, Persistent Systems, stated, “Continuity of business is the mainstay of any succession planning approach. Strategic planning and provision for the future, not for every person down the order, but for middle level and senior and top hierarchy, will indirectly help in strengthening of the relationship with clients as well.”

Eyeing from different angles: company perspective

Succession planning enables strong organizational foundation and stability, which a client needs to be assured of while doing business. M Shyam Kumar, CEO and MD, Director-HR Department, Technoforte Software, said, “Succession planning for us means investment and focus on vigorous mentoring for gearing up the next level responsible professionals in the organization. It also implies continuous strengthening of the foundation because of which the vision and growth of the company is always redefined to the next level.”

Abhimanyu Gupta, Director, Actis Technologies stated, “An ideal organizational structure has to be built on two vital corner stones—stability and continuity. Succession planning facilitates greater focus on important issues since it develops sound contingency plans in place in case of any such requirement.” Sonali Singh, General Manager, HR, e4e Business Solutions, added, “Corporates are looking at ways to minimize critical time and loss of resources, and ensure the least possible disruption takes place when a key person leaves an organization or key positions are left vacant.”

Importance for clients

As clients are increasingly and actively participating in framing vendor policies for employees, succession planning is a requirement that needs to be meticulously designed. Kumar stated, “For our clients, we associate as a partner and not as a vendor. We ensure continuous stability in customer satisfaction by showcasing them the model and process of succession planning of the team. The dependency on individuals is minimized by providing the customer with a ready and strong next level group of members who are ready and geared to take up the challenges and responsibilities. We understand the importance of consistent client support without any factors affecting the customer’s business. Clients understand today’s high demand of various level professionals in the industry. They want to avoid a situation of criticality which affects their business due to key professionals leaving the service providers.” As the ways of business functioning are undergoing a drastic change, the concepts also need to be redefined to meet the evolution. Client confidence in the company, building a long-term relationship of trust, having a face to interact within the organization, are some of the benefits that concern the client companies.

Gupta explained “Client organizations weigh a number of pros and cons while developing a long-term relationship with a service provider. They prefer to deal with a face within an organization whom they can contact in case of an exigency, as there will seldom be a gap in the services being rendered to them in terms of response time and quality since the person responsible will meet their needs and render support whenever required. This also reflects on the well-defined hierarchical structure of the organization, in which responsibilities are well-defined and delegated.”

Impact on clients

Technoforte gives a breakdown on the impact of succession planning on the client business:

• It acts as a confidence measure for the clients on the service providers.
• Stabilizes and consolidates the efficiency of a client’s core business.
• It gives the client a consistent and improved productivity which leads to increased revenue in their business.
• They can focus and spend all their energies on their core competence business without worrying about the work outsourced to the service provider.

Client participation

Clients are no longer just a distant observer. They may participate in formulating the policies and structuring the framework, as also being intensely involved in the adoption and implementation stages. Kumar explained:

• Technoforte has an open dialogue with the customers for understanding their pain points in the engagement.
• Customer’s managers contribute suggestions for improving the efficiency and productivity of the team members.
• Identification of important team members who can play the role of leaders tomorrow.
• Suggestions on proactive approaches at our end to face the challenges of what they are planning in the near future.
• The client also plays a role in stressing importance on key focus areas for succession planning and areas of sharpening the skills in terms of technology and people skills.

Company specific programs

Actis has a very well-defined succession plan in place. The following are the fundamentals on which the succession plan is founded:

• Well conceived and well-defined organizational structure which facilitates growth of the employees.
• A sound reporting structure which brings in accountability and responsibility.
• Grooming of the employees to handle higher responsibilities. This is achieved by involving them in conducting specialized training in the field in which their expertise is to be developed further.
• Having no barriers of communication between the employee and management or senior hierarchy; free flow of information and interaction.
• Building up the senior positions to a standard that the juniors look forward to stepping into their shoes at future stages of their career.

Karayi stated, “Acting with foresight for a planned succession within the organization is considered primary by our HR management. Currently we have disparate systems operating to help us plan for succession. These processes are largely tactical. It includes performance analysis, rating and ranking elements of the PMS, leadership assessment methodology, inputs from promotion interviews for leadership positions, the CV and skills tracker repositories, and informal performance feedback. Inputs from all these various sources are collated by leaders to make decisions about the skills deployment.”

Singh asserted, “At e4e, we have a well-defined Talent Management Program (TMP) in place. Considering the industry that we operate in, it is essential to be prepared for any contingency arising from key leadership movements at the senior levels. Round the year programs for succession planning conducted by internal as well as external professional agencies are chalked out across various levels of the organizations. Here, we identify high potential employees and carry out ‘developmental planning’ in terms of job rotation, coaching, mentoring, shadowing and performance counseling to prepare them for the next level of growth. Training programs such as the ‘Young Turks’, the ‘Corporate Captains’ and the ‘Commanders-in-Chief’ prepare our future leaders to take up different roles in the organization.”

Technoforte gives value addition to clients through innovative processes and policies. Their belief and thereby performance is based on process dependency and not on people dependency.

Persistent has 33 career tracks covering disciplines like project management, technical management, HR, company secretary, finance, etc. They select people who excel in their areas of specialization, and help them blend their process skills with people skills. Bhalerao added, “People high up in the chain-of-command get put through to higher responsible roles. ‘Arjuna’ is one such program where entrepreneurial sparks in employees are detected, and case studies are undertaken, but not in typical classroom sessions. Different modules encompassing a host of topics like industry analysis, six sigma, constructing business scenarios and preparing business plans and models, etc., are discussed and learnt. This means building a team for tomorrow that will take care of the augmenting needs of the expanding business in the geographical level, business scale and clientele.”

Criterion for mapping

While client co-operation is needed for successfully strategizing and charting out a plan, employee initiative and interest also plays a key role. Adding stability to the organization, mapping for the head office as well as branches, being multi-pyramidical in structure, so that growth is not stymied at any stage, facilitating lateral expansion and growth and having a sound foundation to build the structured were some of the notable points put forth by Gupta.

Success of the plan

Succession plan is formulated to take care for any contingency that may rise in the future. It avoids hampering business continuity, and any decisions that may end up jeopardizing the process and its people. In Actis Technologies, at all levels, a clearly defined and executed role of duty pertaining to the policies framed, helps in weeding out unnecessary developments. At the junior levels, the employees are encouraged to handle responsibilities and take decisions, thus grooming them to the next level. At the middle level, they are exposed to innovative thinking and team building so that they can effectively handle higher assignments when called upon. And at the senior level, they are made privy to major policy decisions such as organizational changes, financial planning, long-term organizational plans, business road maps, etc.

Benefits and hindrances

Succession planning is one of the best ways of retaining talent. While the deserved employee gets the recognition and promotion, others are shown a live example of how talent is rewarded. Smooth flow of business helps securing the brand value and image of the company. But, there is a consensus that the benefits accrued easily outweigh the roadblocks encountered. Management and employee co-operation, availability of resources, the ability to change one’s mindset, are some of the common hindrances that need to worked out with sheer conviction and determination.

Conclusion

Any plan implemented by a company must have a long-term vision. It has to be beneficial for all the parties—external and internal, must be flexible, facilitate movement, etc. Karayi summed up, “A formal and well articulated succession planning system helps plan career paths in a more organized and effective way. It helps groom ‘hard to find’ specialist positions in-house, and demons trate to the customer that there is a strong presence of the talent pool. Succession planning ensures that there are highly qualified people in all positions, not just today, but tomorrow, next year and five years from now. It is important to include key positions in a variety of job categories.” This means that the kind of behaviors you want to develop and promote may be different from those in the existing culture. It begins with an assessment of your current workforce and ends with the identification of the culture and the competencies that are required to support an agency of the future.

renuka.vembu@expressindia.com