The right tools for the job

In 2004, McDonald’s CEO Jim Cantalupo passed away suddenly and unexpectedly. Although the company was implementing a stronger focus on talent development, the event took its toll.

Fortunately, due to the increased attention being given to succession planning at the time, it did not take long for successor Charlie Bell to step in. However, Bell was diagnosed with cancer not long after, and he died within the year. McDonald’s was forced to find a replacement again, and Jim Skinner stepped up in 2005.

“Since then, McDonald’s has put lots of emphasis into talent management and succession planning,” says Legion Richardson, director of HR for McDonald’s Malaysia. Succession planning has not come easily for a lot of Asian companies – for a long time the topic was taboo, due to fears that talking about a replacement would offend the existing leader.

But today, the planning for whom will usurp the throne starts nearer the beginning of one’s career path. Given younger employees are more prone to job hopping, the key is mapping out a clear path that is engaging enough to keep them looking ahead.

Starting young

Deciding how early a company should begin a succession plan for an employee begins with a basic discussion, says Butch Clas, HR director for Dow Chemical Pacific SEA and ANZ.

“A part of that discussion may be identifying the gaps and working on how the employee can close them, otherwise they may have unrealistic goals about what they can achieve.”

He adds anyone who job hops too often may have a hard time getting a hearing, as successors must have a track record to prove they are capable for the next role or challenge.

Joan Heng, HR manager at Stolt-Nielsen, says it is up to HR to pinpoint the special skills and potential within an employee, so the company is able to harness that talent early on.

“Start picking out the good performers and high potentials as soon as you see their potential,” she says.

Richardson says McDonald’s views succession planning and career planning as two separate entities. While career planning is for any individual “and should start from day one”, succession planning requires successors for each key position in the organisation.

“One of my KPIs is to partner with all divisional heads and ensure that all key positions have a minimum of one ‘ready now’ and one ‘ready future’ candidate,” Richardson says.

Heng agrees, saying a young employee’s career path and succession plan should work hand-in-hand, moving them up in six to 12-month blocks.

25 (1)Getting ready to fly

So, what about the belief it is more difficult to plan for a Gen Y employee?

“Younger employees are impatient, and a little of this can be good,” Clas says. “If the employee has a good supervisor, most younger employees will give the company the benefit of the doubt. You only lose this if you promise and do not deliver in a timely fashion.”

Richardson says managing Gen Ys starts with a one-on-one conversation. “Every individual is different; one might desire career growth and the other might want exposure. Our job is to create an environment to ensure these conversations between bosses and direct reports happen consistently throughout the year,” he says.

Heng believes leaders can be made by moving young employees up through their career path in quick but small incremental stages.

“This will allow the employee to gain experience and be coached to succeed in their new positions,” she says.

When the going gets tough

When you attempt to put younger, developing employees into more senior roles, there is always a chance they won’t be ready. First-time managers can easily become overwhelmed by the pressures of a promotion.

“Pre-preparation for a leadership role would be the preferred route, as it is always difficult going from an individual contributor to managing others and not over or under managing people as a first-time leader,” Clas says.

Dow Chemicals has programmes designed to help new leaders understand how they have to change, making sure they are aware of the company’s policies and programmes and who they can go to for coaching and advice.

“Having a mentor with leadership experience assigned to a new leader is a good way to coach them on leadership and expectations,” he says.

Hamidah Naziadin, head of group corporate resources at CIMB, says maintaining a deep pool of talent across the organisation is necessary to fill leadership positions at a fast pace, particularly if the company is expanding quickly.

And because employees can jump ship at any time, companies need to understand the warning signs when it looks like developing talent might leave. Naziadin says end-to-end talent management is imperative to avoid bottle-necking the talent pipeline with developing and senior leaders. “We have to ensure the management hierarchy is given attention,” she says.

 

Nothing is ever perfect

Of course, there is no such thing as a perfect system, Clas says, but when companies do get it right, it shows.

“I have seen some MNCs do a very rigorous succession planning process and follow it to the letter. Most companies will have some type of succession planning method and follow-up.”

Richardson says McDonald’s recognition as a top company for leaders has happened over the past 60 years, and not overnight.

“The first step to good succession planning is to have a structured process in place and proper follow through on its execution,” he says.

Planning pitfalls HR leaders share their succession woes.

One of the most commonly faced succession planning issues is the process of getting leaders committed to a high potential’s development plan.

“Getting leaders to identify the candidates is relatively easy,” Clas says. “It is getting them to commit to the developments needed so the individual is ready when the job comes open.”

Richardson says sustained success in doing this requires more consistent approaches to talent management.

“One of the biggest issues is the shortage of the right talent in the workforce,” he says, adding McDonald’s has worked to combat this through finely tuned training and development systems.

Clas says it is also hard to get the current supervisor to “let go” after a candidate identified.

Heng believes staying transparent about succession is also a struggle. If a candidate knows about the plan it can create a positive impact, but it can also cause them to simply count down to their promotion.

“It can work both ways,” she says.