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April 2, 2012 Advice squad

Don’t stop at the top. Here are three steps for building continuity in your business.

“Does anyone here think succession planning is not necessary?” I asked a room full of business leaders. No hands. Good, they're believers. “Who here has succession plans in place in their organization?” No hands. In fact, people looked around and giggled. Not so good. They're believers who don't do anything about it.

June Juliano, owner of Acapello Salons and The Men's Room , and David Pease, senior vice president and chief resource officer of Androscoggin Bank, and I were presenting a conference seminar on the topic. We clearly had our work cut out in our call to action.

We're all familiar with the long-standing practice of executive succession planning. For example, David's organization has just chosen a new CEO, thanks to a succession plan put in place four years before. But are executives the only people we need to plan to replace?

You never know when highly experienced people will leave. Consider two current factors: economic recovery and the aging work force. As employment opportunities rise, voluntary turnover will rise. As baby-boomers retire, there will be unprecedented departures of expertise.

What are organizations waiting for? Succession planning is a good idea. The alternative strategy is “keep your fingers crossed that someone talented pops up.”

Succession planning is simply a process to identify and develop qualified, talented and eager candidates. It encompasses formal and informal leadership, and expertise. The following steps provide the basics of a solid succession plan:

Step one: Hire for a position with professional growth in mind. The goal is to create as large a pool of potential successors as possible. Hire people who could rise at least two levels above the challenges of their specific jobs. People must step up beyond their current job definitions if organizations are to thrive.

At Acapello Salons, staff members continuously take on new roles. June makes the prospect of promotion attractive and accessible. She has structured formal leadership to fit with the staff's artistic and service orientations, centralizing administrative and human resources duties. She then promotes and mentors someone with the talent and drive to excel in those areas. That person, in turn, mentors a team interested in those responsibilities who will be candidates to succeed her.

Androscoggin Bank‘s new senior leadership team is comprised of young people with middle management experience who must lead the organization in new directions. They are a team of six, versus the traditional three. David says a three-legged stool falls over if one leg is removed, but the six-legged stool remains stable. He is mentoring them in high-level leadership skills with each positioning to be a good candidate for the bank's top roles. In its CEO succession plan, the bank was not looking just for the next CEO; it was looking for a group of viable successors.

Step two: Choose candidates for succession based on attributes, not tenure. Choose them fairly and accurately for high potential. Give people chances to show different sides. Note how they approach learning, how they seek and use feedback. Measure how they perform compared to expectations; people with high potential aim to exceed. Encourage and document their creativity. Observe how they demonstrate leadership in their current roles. High potential performers don't wait for opportunities, they make them.

Giving feedback is vital to cultivating high potential and realistic self-appraisal. June says, “If you've worked with people closely, they themselves know if they are candidates or not. It's important to know how they have performed and how they approach new levels of responsibility before you promote them.” David adds, “I balance positive and improvement feedback, as merited. I'm brutally honest. I select people with diverse skill sets and from whom I can learn. I look for people to be open, honest, coachable and accept feedback as a gift.”

Step three: Develop people toward leadership. Give them interesting work and the power to do it well. Mentor them. At Acapello Salons and Androscoggin Bank, people with higher expertise mentor aspirants throughout the organizations. Mentoring is core to each culture, encompassing the entire succession planning process.

Use in-house expertise by structuring a mentor system that defines and selects high potential performers, shapes individualized goals and helps measure and assess their own performances. Give the mentors support and training.

Succession planning minimizes the significant expense of hiring from outside, builds on inside talent, engenders loyalty and increases organizational capacity. A good plan trumps crossed fingers every time.

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