Succession Planning in Middle Management - Essay Example

An Investigation into the Succession Planning in the Middle Management Within the Cayman Islands Rationale An investigation into the succession planning in the middle management within the Cayman Islands will be conducted to determine if succession planning is being conducted in the Cayman Islands. This will be done through interviews with the people of Cayman Islands who are part of the middle management in organizations in the said place. Result of the survey will be analyzed to come up with conclusions that will determine if indeed succession planning is being conducted.. Main Research Question The main research question is: Does the people who belong in the middle management in organizations based in the Cayman Island practicing succession planning Literature Review Succession planning is a process that moves beyond "one-off'" replacement planning into a process of identifying and nurturing a pool of potential candidates for leadership positions. Effective succession planning should be integral to the organization's culture, and the process should cultivate "predictability" rather than "chaos" or last minute scrambling to find potential leadership candidates (Succession Planning for Nursing Leadership, 2006). Succession planning considers moving through different levels of leadership, such as local chapters to provincial or territorial to national organizations. Stated simply, business succession planning is the process of protecting the owners of a business by planning for the incapacity or death of an owner. The succession plan should address (i) the identity of the successor manager(s) of the business, (ii) the identity of the successor owner(s) of the business (perhaps most importantly, by identifying permissible successor owners, we identify those who cannot be successor owner(s) - creditors and other outsiders), and (iii) treatment of the interest of a departing owner, whether the departure is due to retirement, disability or death. The advantage of putting a plan in place to deal with inevitable events is that we limit (or eliminate) the unknown and can reach mutual consensus before a potential crisis. Succession planning aims to attract high potential people (rising stars) to develop as leaders, enhance other's leadership skills through formal and informal methods, improve all aspects of others' potential and institutionalize leadership development in your association or organization. Succession planning along with workforce management in general is increasingly regarded as a growing influence in determining the success of an enterprise. If it is undertaken effectively then it can ensure that your organization has capable and trained managers to guide its growth (Succession wizard, 2006). The importance of succession planning is in the move to flatter management structures. Succession planning is insurance for when key people leave an organization. With fewer layers of middle management available to fill these key roles it is important that potential successors are identified early and given appropriate training so that when the time comes for their move to more senior roles disruption is minimized. The important thing is to build a succession plan which is ongoing and durable rather than something which you just look at during the annual planning process. People are the most important asset and good workforce planning will give business a clear performance and competitive advantage. Organizations generally have a wealth of talent already working in different positions and levels throughout their business. This hidden resource needs to be identified and tapped as it is a key factor in effective succession planning. Workforce planning allows to know the skills and resources that are already in these people. Utilizing gap analysis, succession planning can identify those people who, with provision of support and training, can climb management structure and become its future leaders. Common elements of succession planning are balance of succession in the industry and organization, succession planning competencies, desired skills and behaviour assessments. There should be a balance of succession planning in the industry and organization. Identify where the business is exposed because of insufficient cover for certain positions. Succession planning enables the organization to control succession planning and resolve areas of concern quickly. According to the article "Succession Planning" (2006), effective succession planning adds core competency mapping to our leadership development process. It creates a clear understanding of the components of effective leadership for various management positions within the organization. A well-constructed competency map can be very helpful to the members of the organization in providing direction and focus to their development efforts. Mapping leadership attribute sets to an organization's competencies helps the organization to identify and understand the specific leadership behaviours that each competency requires. It then allows the organization to assess and develop its leadership talent using a set of development tools. The process of competency mapping involves the following steps: (1) Gain a thorough understanding of each competency. Get as much information as you can about each competency, including a detailed description of it, the rationale behind choosing it, and the expected outcomes of developing it. Identify specific examples of observable behaviour that would or would not occur if people were demonstrating the competency; (2) Given our knowledge of the competency map and the leadership attribute sets, determine the sets that would be most involved in developing and demonstrating each competency. It's important to keep the list of leadership attribute sets for each competency as short as possible; including only the sets that would be the key behavioural components of the competency (Succession Planning, 2006). Desired skills should be attained. Workforce management helps to match suitable people to specific jobs. Find roles which fit the competencies of an individual. Incoll (2004), in his paper, mentioned that behaviour assessment is critical in succession planning. Behavioural competency profiling provides the basis for selection, coaching, performance evaluation and assessment, career development and succession planning. The rate at which an organisation learns will determine its sustainable competitive advantage. No longer do competitive forces permit gradual continuous improvement toward strategic goals set by senior management. A workforce linked by shared values, trust, close communication and information sharing will also be closer to customers and markets. This superior understanding will ensure faster response to changing market imperatives that will drive competitive business success (Incoll, 2004). Succession planning is being conducted by many organizations due to several reasons. Succession planning remains at the very heart of an organization's ability to consistently compete and deliver shareholder value in today's rapidly evolving global economy. The dynamics of today's marketplace dictate that companies take a more proactive approach to their succession planning practices. It is not merely enough for companies to prepare for planned, executive transitions of senior company officers. Long gone are the days when company's had the luxury of time to prepare themselves for the proverbial passing of the baton when executive succession was a tidy, well-orchestrated event. Without a commitment to developing a proactive succession planning framework, any organization is at great risk for the persistent uncertainties of unexpected executive departures for whatever the reason. Commitment to the succession planning process can be an organization's best safeguard against unexpected executive departures. In successful planning, the feedback of the clients are taken to conduct a thorough examination of potential areas of exposure that may be presented due to unexpected executive departures. After these specific areas of risk are identified, there is a need to work with the clients to develop a carefully planned succession planning framework across multiple functional areas. This succession framework is then used by the clients to proactively manage the potential risks of unexpected executive departures (Clients Services: Succession Planning, 2006). Issues such as immigration reform is having a long-lasting effects on recruitment and succession planning. Other issues that can be taken into considerations include global security and regulatory reform (WisdomNet Releases "Advanced Succession Planning: Next Generation Practices for Ensuring Your Organization's Future": White Paper Reveals Changes in Succession Planning Practices, 2006). In succession planning the output is a succession plan. A succession plan is unlike any other kind of business plan. Normally, business planning is focused at the operations level such as managing workflow, developing a budget or marketing plan, organizational, administrative, personnel or equipment planning. But a succession plan is owner-based and therefore focused, not on business needs but on the goals your business must achieve before you can leave it in the style that you desire. The succession plan system helps owners of private and family businesses plan for the inevitable time when they will leave their businesses (A Written SuccessionPlan, 2006). On the other hand, continuity plans should be carefully drawn and implemented. There are a number of ways in which continuity plans can be implemented. The programs to be implemented under this continuity plan can be run over a network with information shared amongst a number of users, or alternatively on a single PC or laptop by an administrator looking after a number of business units. Reports displaying management planning information can be configured to match user criteria. The content can be filtered to ensure only required information is shown. Additional information such as job profiles, competencies, photographs and notes can be easily added. Information can be imported from (and exported to) other systems allowing existing information to be quickly incorporated. Based on the "Focus Succession Planning and Talent Management" (2006), some jobs are the lifeblood of your organization. They are just too critical to be vacant or filled by any but the most qualified persons. To ensure continuity for these positions, use focus succession planning. Subjective judgments of "potential" successor are often wrong, can drive away good employees, and may even create legal liabilities. Focus succession planning may rank candidates based on fit with job requirements and gives ready access to in-depth information on each candidate including on-line resumes of candidates, job preferences, development plans, past results. Identifying potential back-ups is not enough. Focus succession planning has extensive employee development functionality. Employees can create detailed development plans, identify action plans, training resources, success measures, and more. Succession Planning tracks each candidate's development progress. Focus succession planning distributes responsibility for oversight of Succession Planning. "Owners" of each replacement chart or pool have tools and reports to help them as well as customizable alerts to problems such as too few incumbents or back-ups, development plans gone awry, failure to meet diversity goals, etc. Focus succession planning supports job replacement charts, succession pools, or both. The focus employee resume is divided into parts completed by the employee and the organization. Use the default resume, modify, or create your own. Succession candidates often benefit from a mentor. Focus succession planning recognizes mentors and provides them with software functionality to assist their work with candidates for promotion Develop bench strength. Individual development plans, development tracking, responsibilities clearly defined for present and future positions, and measures of development success all build bench strength. Focus succession planning also comes with a set of training resources. "What Ifs": See a major strategy change coming Focus succession planning lets you model hypothetical jobs or competency needs, evaluate staff readiness, and put plans in place to prepare people. Chain of Moves Analysis can be conducted. Moving a person may create a gap that cannot be filled. Succession planning tells the best combination of moves to maximize overall quality of job incumbents for talent management. This will result to valid, defensible data. This quantitatively and equitably matches people and jobs. Multi-rater feedback and candidate histories help avoid subjective, error-prone judgments of "potential" ("Focus Succession Planning and Talent Management", 2006). The typical steps to implement focus succession planning are (1) Identify staffing needed to implement organization strategy. Develop succession planning metrics; (2) Select critical jobs. Decide on optimal replacement chart and pool structure; (3) Assess candidates; (4) Select back-ups; (5) Implement development plans; (6) Track progress against metrics for individual candidates and the program overall. Succession planning team is important in implementing a business succession plan. This generally requires the involvement of three professionals - an attorney (who will draft the operative documents), a Certified Public Accountant (who will chart the income tax course) and a financial planner (who will ensure the financial viability of the business as the plan unfolds). The process in identifying staff inside and outside the company is sometimes critical. Powerful search facility allows the database to be filtered in many different ways to allow specific criteria to be retrieved and candidates easily identified. In addition to retaining an attorney to draft the operative documents, it is important to involve a CPA to monitor the tax implications of the transactions directed in the architecture of the business succession plan and a financial professional to discuss the financial viability of the plan as it affects the business and the individual business owners. For example, if a buy-sell agreement directs the business to purchase the ownership interest of a deceased owner, the CPA will determine what are the income tax consequences to the business (and to the individual owners) and how will money be raised for the structured buy-out The CPA and financial professional are integral to assessing the viability of a succession plan from all angles. Succession planning is being done which embraces tax efficient use of trusts, ensuring up to date wills and effective passing of wealth to beneficiaries as well as give education and training provision to members of the family or education. An example of succession planning is in a farm family. The farm family in this example has a relatively large farm and very successful. The farm was progressive and well-managed, incorporated with Mom and Dad as the common shareholders. A family farm in the truest sense. An eldest son and two younger daughters, one of whom is in post secondary school and the other in Grade 11. The son wants to farm and has completed post secondary education. The farm has expanded recently, acquiring additional land, in anticipation of the son's return. The farm generates good levels of profit from year to year. It is fairly leveraged, carrying a pretty good debt load. Mom and Dad decided they needed to get their 'succession plan' in place. They started by doing some research. They talked to their accountant, their lawyer and an investment advisor. They collected a lot of great information and developed a really good understanding of the tax, legal and investment issues that needed to be addressed. But they still did not feel comfortable with where things were at. And herein lies the problem and where 'succession planning' is mixed up. Certainly, the tax and legal issues need to be resolved in a manner most suitable to the family. But from a family and farm perspective, the single most important element is the transfer of ownership and management. And this is not an event. It is a process. It is a process that should be started years and years in advance. This is a process that never actually ends. When a farm is transitioned to the next generation, the process starts again. It is in this area that the family applied what they had learned from their accountant, lawyer and investment advisor. They listed in detail and in order, the steps each of their professional advisors had told them were required to be completed as part of the transition process. After working this out, the family finished working through the planning process and are now implementing their plan. The planning processed used here was a process followed by businesses, large and small, all over the world. This is the strategic planning process. And herein lies the problem. Transition planning is really just part of a longer-term or strategic farm plan that includes a transition of ownership and management to the next generation. It should not be treated as an event or 'one-off' plan. In some places it is not being done. For instance, selling the business is not often considered a succession-planning strategy, since a sale often happens as a last resort when no planning has been done. However, selling the business, whether to management-level employees or an outside party, is an effective succession-planning tool. Prior planning is necessary, however, to obtain maximum value. Financial statements must be spruced up, operational issues addressed, and the business marketed to the broadest audience possible. Methodology This paper indicates the particular research orientation - the epistemological stance that has been adopted. This links were chosen in with this author's chosen research strategy to effectively reflect the succession planning in the middle management in Cayman Islands. In addition, alternative methodologies were rejected since the author decided that this methodology will best scrutinized the succession planning in the middle management in Cayman Islands. This paper will be focused on locating epistemological arguments. The specific view of research communities might operate to exclude (as outside the ambit of relevant argument) the concerns of those who challenge the proposed conception of the practice of research (Romm, 1997). It is possible to create less exclusivist spaces for discourse around the notion of 'bias', including discussions around researcher responsibilities. The creation and vitalisation of this space is part of the process of extending 'researcher accountability'. This accountability in turn implies a recognition that the proper validating communities for assessing processes of social inquiry need not be confined to those subscribing to the proposed epistemological stance (Romm, 1997) Method The methods chosen are semi-structured interviews and collection of data. These have been selected since these methods will result to gathering of necessary data to be analyzed. The advantage of these methods is that it will clearly reflect the real situation in the Cayman Islands since first hand information through interviews and gathering of data will be collected. The channel of collecting data is through survey questionnaires. This channel of collecting data, distribution and collection for questionnaires and face to face interviews and telephone interviews, were chosen since data to be gathered will have high level of accuracy. This research will be conducted locally through interviews of fifteen companies in the professional services with over fifty employees will be conducted in the Cayman Islands. The interview will be structured to determine if contingency succession planning with regards to hurricanes is in place in the middle management in the Cayman Islands. During hurricanes, some people leave during these times and never return back. Immigration legislation should be created on work permits of foreign nationals working and the need for continuous training and development of locals as the Immigration stipulates that Caymanians are trained by ex-pacts. There should be general transitions and turnover of people moving on to better opportunities. Sampling The sampling framework that is chosen is sampling two hundred respondents belonging to the middle management in the Cayman Islands. Random sampling will be done. Resources Needed Budget needed will be for the preparation, reproduction and distribution of the survey questionnaires (photocopying and postage, and tape recorder or a Dictaphone for interviews). Value of Research This research will contribute to a better understanding of the strategic management and/or development of human resources. It will have practical value for the organisations based in the Cayman Islands and for other future researchers who will conduct more advance studies. Technical Issues Likely technical problems will be in the distribution of survey questionnaires. Distribution of the questionnaires and conduct of interviews will take sometime. The researcher will also has to set schedules and appointments with the interviewees since all of the interviewees has regular work schedules. Proposed solution to this is to set schedules and appointments ahead of time. There is also a need to strategically schedule and conduct interviews to save on transportation expenses. There may also be low response rate to a questionnaire since the questionnaires will require ample time to answer the questionnaires. These questionnaires will also require input from the employee and his/her respective supervisor(s). To avoid such problems, send correspondence to the interviewees and their respective companies, follow-up, send reminder letters to increase questionnaire response rates. Ethical Problems There is a need to respect ethical guidelines/ethical principles and take account of ethical problems like refraining as much as possible from asking people sensitive or controversial questions. To avoid such problems, draft and review many times the questionnaires. Follow the ethical standards in conducting survey. When undertaking any research it is very important that the interviewer understands and makes reference to at least one statement of ethical practice. References A Written Succession Plan. 2005. http://www.successionplan.co.nz/index.htm. Business Succession Planning. Vaughan Fincher and Sotelo: The Trust ad Estate Attorney, June 10, 2006. http://www.vfspc.com/services/succession.asp Clients Services: Succession Planning. Venerable Partners: Limited Liability Company, June 16, 2006. http://venerablepartners.com/succession-planning.asp Eriksen, Thomas B. Planning Necessary for Effective and Efficient Business Succession: Part III. Jordan Schrader: Attorneys at Law. 2006 by Jordan Schrader PC. http://www.jordanschrader.com/articles/article0120.html Focus Succession Planning & Talent Management. Focus, 2006. Business Decisions, Inc. http://www.businessdecisions.com/Succession_Planning.asp. Incoll, Russel. 2004. People Management and Competency Profiling. TestGrid. TestGrid Pty Ltd. https://tg6.testgrid.com/docs/PeopleManagement&CompetencyProfiling.pdf. Succession Planning. TAP Resource Development Group, Inc., June 21, 2006. http://www.tapresource.com/services_successionplanning.htm. Succession Planning for Nursing Leadership. CAN Nurses, June 17, 2006. http://www.cna-nurses.ca/CNA/documents/pdf/publications/succession_planning_e.pdf Succession Wizard: Making Succession Planning Simple. Succession Wizard, June 16, 2006. Pembrokeshire, U.K.: Norchard Solutions Limited. http://www.successionwizard.com/ Romm, N. (1997) 'Becoming More Accountable: A Comment on Hammersley and Gomm'. Sociological Research Online, vol. 2, no. 3. Sociological Research Online, 1997. of http://www.socresonline.org.uk/2/3/2.html WisdomNet Releases "Advanced Succession Planning: Next Generation Practices for Ensuring Your Organization's Future": White Paper Reveals Changes in Succession Planning Practices, May 8, 2006. WisdomNet, Inc. http://www.wisdomnet.net/newsStory.aspsub=press&item=aspwhitepaper Appendix Appendix 1 : Ethical Checklist Appendix 2 : Survey Questionnaires A. Key Information on Areas of Concern 1. Company Name : 2. Address : 3. Number of Staff : Emergency _____ Ready _____ < 2 years _____ > 2 years _____ B. Staff information and Competency Scores 1. Staff Profile a. Name : _________________________ b. Date of Birth : _________________________ c. Age : _________________________ d. Gender : _________________________ e. Telephone Number(s) : _________________________ 2. Job Profile a. Job Title : _________________________ b. Division : _________________________ c. Department : _________________________ d. Line Manager : _________________________ e. Location : _________________________ f. Payroll Number : _________________________ g. Grade : _________________________ h. Status : _________________________ i. Level : _________________________ j. Team Size : _________________________ k. Number of Subordinates : ________________________ l. Succeeded by : _________________________ Emergency _____ Ready _____ < 2 years _____ > 2 years _____ m. Successor to : _________________________ II. Job Information on Suitable Candidates for Specific Roles a. Previous Job History (To be filled-up by the interviewee) Period Covered Position Company b. Competency (To be filled-up by the direct supervisor) Competency Score Adaptability Ambition Change Management Coaching Creativity Delegation Leadership Negotiation c. Summary of Staff Competency Name of Employee Competency Scores Adaptability Ambition Change Mgt Coaching Creativity Delegation Leadership Negotiation d. Succeeded by / Successor to Details Succeeded By Name/ Job Title Job Start/ Age Successor to >2 yrs Read More