Succession Management is a strategic alignment of an organisation’s key talent with a few, but high-impact critical positions that are accountable for the organisation’s direction, sustainability, and growth. Based on numerous case studies and organisational research, it has been found that the major derailer in the succession management process is a lack of accuracy in ascertaining the critical positions. The critical positions as the first step are the foundations of succession management effectiveness in organisations. They have a disproportionately high and strategic impact in attaining the firm’s primary goals. It has been also observed that some or most of organisations equate Leadership Positions as critical positions. Construing all leadership positions as critical positions is erroneous from the succession management perspective as all leadership positions are not truly critical positions and, some of the non-leadership positions could also be critical positions. In other words, critical positions could be at any level in the organisation, and they may reside at any point on the organisation chart. For example, the Biochemist position in a pharmaceutical company or Crane operator position in a Port Management company are found to be Critical positions, though they are not leadership positions in these organisations. Thus, it is imperative to meticulously identify critical positions with high precision for the effectiveness of succession management.
Importance of adherence to the number of critical positions:
One of the key metrics in Succession Management is adherence to only 10%-12% of total positions in an organisation as critical positions. It is also one of the benchmarks in the succession management process in high-performing organisations globally. It has been found that the identification of 10%-12% of total positions as Critical positions has been a challenging task in various organisations as most of the organisations have been using qualitative criteria such as Long-Term impact, Specialisation of skills and Availability of resources to determine the critical position. The qualitative nature of these criteria makes it more difficult to determine the true critical positions. These qualitative criteria lead to subjectivity, inconsistency, hierarchical and relationship preferences in deciding critical positions and decisions based on these factors cause two kinds of errors in the critical positions identification process. First, some of the true critical positions are missed out and some of the non-critical positions find a place in the final list of the critical positions. Moreover, it becomes further difficult for the organisations to adhere to the metrics of only 10-12% positions as critical.
Linkage of feeder positions with critical positions:
The other reason which makes the identification of precise critical positions of high significance is the determination of Feeder positions which are further derived from the “Critical Positions”. The prime criterion to determine the feeder positions is the magnitude of competency overlaps with the critical positions. The magnitude of competency overlap is ascertained based on the competency correlation coefficients between the critical and the feeder positions. So, the lack of precision of Critical positions down the stream leads to inaccuracy in the identification of Feeder positions as well and eventually, this has an adverse impact on the succession management effectiveness.
Critical positions identification diagnostic (CPID) tool: Potential solutions
To solve these constraints and challenges, a“Critical Position Identification Diagnostic (CPID) tool” which provides the criticality score for the positions under review, can be used. The CPID diagnostic tool is based on seven important factors,
- The direct strategic impact of the positions in organisational sustenance and growth,
- Scope of authority of the position,
- Effect on economic value creation in the organisation,
- Consequences of mistakes for the organisation,
- Specialisations/Subject Matter Expertise required for the positions,
- Availability of scarce resources or talent in the highly competitive market and
- Consequences of hiring the wrong individuals in terms of lost opportunity and onboarding & training costs
The criticality score for each position is calculated based on the total scores ascribed to the specific positions using these seven factors. By identifying critical positions and managing current and/or potential incumbents for these critical positions, organisations can ensure that succession pipeline continuity is in place for achieving key business results continuously. This instrument can also be used to vet or validate the identified critical positions based on the calculation of their “Criticality Scores”. The defined norms and the range of the scores determine the nature of positions as “Critical”, “Important” and “Operational/supporting Positions”. The CPID tool or instrument is currently under publication.
The various other components of Succession Management i.e. Assessment and validation of role holders occupying critical positions, Identification/selection of succession candidates based on robust methods of assessment, Determination of succession candidates' readiness levels, Bench strengths of critical positions, creation of Individual Development Plans (IDPs) and the developmental interventions for the succession candidates are also crucial for the efficacy of Succession Management process. However, the foundational component, the “Critical Positions” is the bedrock of Succession Management, and all other components hinge on them. If the Critical Positions are not the most relevant and appropriate, the other remaining components cannot yield the best business outcome from the succession management process. Thus, the appropriateness or lack of appropriateness of “Critical Position” could be the key driver or major derailer respectively of the succession management process in the organisations.