30 May 2014 By Northern Lights
Claire Morley-Jones is the founder of HR180, a leading advisory firm that helps businesses with all aspects of people management and development. She recently delivered a talk on succession planning to the Managing Partners’ Forum and here she shares her thoughts on the issue.
Succession planning is a fundamental part of any business’ future survival but amongst law firms, until recently, there has been relative disinterest in the subject. A number of businesses have key individuals who are integral to the success of the company and are closely tied to major clients. Ask yourself, if they leave, can you fill the void and can you maintain a productive relationship with their clients? All too often the answer is ‘no’ and, quite simply, you are stuffed.
The problem is more acute in the legal sector. Law firms have endured a torrid period in recent years and a number of major firms have been forced to join forces or have collapsed amid a stormy new economic climate.
The structure of many smaller law firms hasn’t changed enough to allow the maximum potential for succession planning and, as senior partners have retired, they have lost major clients and seen revenues plummet.
Traditionally, law firms survived by gradually replacing retiring partners with younger members of the team who had spent a substantial number of years with the firm. They were happy to commit their working life to a firm and work through the ranks.
However, that model has changed. “Generation Y” is looking for something completely different and is no longer willing to work for the same firm and serve their time as they wait to be invited to become a partner. They don’t want the gold watch or carriage clock and are working to fast-track their careers by seeking lucrative moves to other firms, often taking vital clients and revenues with them.
Succession planning is only growing in importance. Our workforce is aging and firms need to work hard to make sure they have a pipeline of talent coming through the ranks. In the UK, 16 per cent of the workforce is over 55 years of age. Across the world, 78 million baby boomers are rapidly approaching retirement age.
What that means is every business needs a clear succession planning strategy. Without competent, effective leadership any firm flounders. Everyone else in the business needs direction, goals and motivation and if the people who are providing that decide to leave, how do you fill their shoes?
Succession planning involves:
The first step in succession planning is to develop a clear business plan for the years ahead and identify the skills you need in the business to achieve your goals. When you have a clear strategy, you can then make sure the roles needed are filled with the right people.
You also need to look closely at the business and identify your key workers – those who are an expert in their part of the business. You then need to consider if the business could survive if they decide to leave.
Firms need to look for the superstars of the future – either in their own business or elsewhere – and then consider how to motivate them, engage them, provide the skills they need to step up to a key role and, most importantly, retain them.
Succession planning is the process of identifying high-potential employees, evaluating and honing their skills and abilities, and preparing them for advancement into positions which are key to the success of business operations and objectives.
To do that, you need to teach them the behaviours they need to succeed. It’s not about training them to replace the person, it’s about training them to fulfil the role and find their own way of doing things.
Culture is key. Businesses can’t have ivory towers, they must be open and honest and ask workers how they can make the workforce the best it can be. Communication is vital and business leaders have to make time for communication with everyone in the business. It has to be part of the DNA of the company.
Research shows that employees believe leadership is a key contributor to job satisfaction, commitment and intent to stay – this is especially true for top talent. Surveys also show that employees most value the leadership qualities of honesty and integrity.
By communicating openly and honestly, you can quickly identify the people who are hungry to progress and those with the potential to lead the business in the future.
Training is a major part if succession planning and also plays a hugely important role in retention. If people know they are being groomed for the top jobs, they will remain committed to the company.
However, too many firms concentrate on identifying the weaknesses of an individual and then try to fix them. At best you will only marginally improve their weaknesses and it is far better to accept a weakness and then work to accommodate it.
Put the right team around a superstar that will compensate for any weakness and then hone the skills that will make them the future leader the company needs.
It’s also important to make sure they are seen as an integral part of the business. Make sure they are exposed to key clients by involving them with project work, providing extra duties or simply by shadowing the current leaders.
Benefits of succession planning
The majority of businesses will have potential new leaders within their ranks and the key is to identify them early on and then make sure you can retain them with the professional development they want. If you need to find an external talent, bring them into the business early on as it will take far longer to develop their understanding of the business culture and its needs.
All too often succession planning is only tackled when disaster strikes and businesses must make it an integral part of their business strategy to avoid future shocks that could prove to be costly.
Succession planning has many benefits. The business ensures it has a prosperous future by guaranteeing a supply of talent for key roles and tasks. Employees get a clear opportunity to grow, learn, evolve and advance through the ranks of the company. Most importantly, customers deal with people who are reliable, knowledgeable and meet their expectations – resulting in stronger relationships and better returns for your business.