3 data challenges that hinder effective succession planning

3 Data Challenges That Hinder Effective Succession Planning

This is the first part of a four part series on common challenges of Succession Planning.

Succession Planning is critical for organisations to ensure business continuity and success. Majority (86%) of leaders believe in its urgency and importance, however, only 14% believe that the organisation is doing it well*. One cause for concern is data, as succession planning is for most organisations still a subjective process susceptible to human bias. While there is no one size fits all approach to succession planning across different organisations, it is important to recognise that good data is one of the key success factors because the right decisions can be made.

Majority (86%) of leaders believe in its urgency and importance, however, only 14% believe that the organisation is doing it well

Deloitte

The overarching goal of succession planning is to have a pipeline of leaders across the organisation for mission critical or key positions. With a steady pipeline of leaders, organisations will have a stronger organisational culture, a future-proof workforce as well as better stability and resilience*.

However, selecting the wrong talent comes with a price that could lead to detrimental consequences for the organisation. Hence, it is of importance for organisations to prioritise a more analytical and scientific approach to succession planning. And yet, many organisations still face difficulties when it comes to data in succession planning, the 3 key factors being – Data Collection, Data Analysis and Data Outcomes.

01 Data Collection

In a survey, more than 50% of organisations approach succession planning and data collection in an unplanned and ad-hoc manner**. This may cause organisations to lose out in taking into consideration relevant and crucial data, especially data that is already existing. In actuality, data from existing processes in place, e.g. formal appraisals, 360 feedback, performance ratings, could add value and better inform decisions in the succession planning process but are usually overlooked and not collected.

Furthermore, the data are all sitting in separate spreadsheets and platforms and require significant effort for its collection and compilation for the succession planning process. This as a result also makes it harder for succession planning to be scalable across more employees and positions due to the effort required. 

02 Data Analysis

With existing data sitting in different platforms and sources, it is difficult for organisations to connect the dots between them when evaluating candidates for succession planning. Although organisations are increasingly taking steps to support or drive succession planning, many still lack the appropriate tools to ease the process and make sense of the data objectively. In addition, many organisations miss out on certain data that can be utilised to predict a candidate’s potential. In most cases, only existing data of performance in the current position is taken into account, while other data, e.g. psychometric/behavioural data and agility which can be used to predict potential against the specific new position, is overlooked. Past performance data should not be the only determining factor in succession planning, as future potential is as crucial an element. Otherwise, it would be falling into the pitfall of the Peter Principle, whereby candidates are evaluated based on criteria and expectations of their previous role, instead of the intended/succeeded role which requires different skillsets and capabilities.

03 Data Outcome

Most organisations face difficulties in visualising and drawing insights about talents in a data-driven and objective manner for decision-making. With that challenge, succession plans tend to fall back on subjectivity and gut feeling. Only 55% of board directors / leaders have a clear view and understanding of the strengths and weaknesses of the senior executives in detail.*** There is a lack of clarity and holistic visibility to the capabilities of the talent pool. Instead, leaders tend to default to subjective factors and instincts such as likability, tenure, relationships or informal evaluations to make decisions on their preferred successor. Furthermore, leaders inadvertently select successors who are a lot like themselves or their idea of what a successor should be like. This is exacerbated by their confirmation bias whereby they already have this impression or opinion of a candidate and would only accept information that supports their original belief, thereby rejecting information that does not. 

In conclusion,

While many organisations recognise the importance of succession planning and are making it a key priority, it is still difficult for them to yield results and see the expected value from it. Organisations face a myriad of human bias and inconsistencies in their decision making, on top of the pain points in collecting, managing and evaluating data that should otherwise be used to eliminate subjectivity. In order to take control of their succession planning and ensure its effectiveness, organisations need to address the aforementioned data challenges by putting in place the right processes and solutions based on best practices and a data-driven approach to succession plan effectively.

References

*https://www2.deloitte.com/us/en/insights/topics/leadership/effective-leadership-succession-planning.html 

** https://www.ciphr.com/advice/succession-planning-matters-many-companies-get-wrong/

***https://www.gsb.stanford.edu/faculty-research/publications/2014-how-well-do-corporate-directors-know-senior-management

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