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Teams and organizations that rely solely on the HR function for succession planning are doing themselves a disservice, write Joy Taylor and Kim Lehman.
The importance of succession planning – the process of identifying replacements for key roles within an organization – cannot be overstated. It prepares future leaders at all levels of an organization to move into other roles should an employee get promoted, retire or leave. Having a well-reasoned approach to succession planning also offers numerous benefits to the organization, such as:
• Reducing operational risk and minimizing impact to the business
• Preserving key skills
• Promoting learning through career development, which translates into more engaged employees and improved retention
• Transferring knowledge proactively vs. reactively, allowing for a controlled transition
• Determining when to jump skill – or pull from outside the organization or even the industry to dynamically shift the organization in the case of rapid growth.
Most industries, however, leave succession planning to leaders in Human Resources. While it is true this group is traditionally responsible for supporting the company in developing succession plans, teams and organizations that rely solely on the HR function are doing themselves a disservice. And in the world of life sciences, these types of decisions can impact the organization operationally, and ultimately the stock price, if not managed correctly. Given the demanding environment of this industry, succession planning is a full-contact sport, which requires companies to keep their best talent and seek out game-changing leaders from outside on a regular basis.
For organizations with a vested interest in moving the needle and attracting the best talent, succession planning must move from the exclusive domain of HR and engage leaders and teams across the enterprise – specifically the business development team and those leaders who manage strategic programs. While all business leaders should be part of this effort for their individual departments or functions, for life science organizations, these two areas really move the needle. Succession planning must be more than a casual people conversation.
Succession planning must include the vision of the people selecting where the company will be three to 20 years in the future. As business development leaders spend their days investigating new technologies, biomedical startups or product pipeline builders, they’re certainly considering the talent that would accompany such an acquisition. Leaders are hard to come by, and those that have an entrepreneurial energy attract risk takers, nimble decision makers and those that are not traditionally found in companies like the behemoths of pharma. Life sciences companies are seeking talent that can change how they engage with customers. Business development teams exploring acquisitions are likely in the strongest position to impact succession planning because they are interacting with new talent that reflects the changing market as well – and, once acquired, who will seek a sustained leadership role in the new company.
While an unusual spin on the responsibilities of the business development team, succession planning should be, at the very least, an annual exercise. These team members should be active participants in setting the direction of the organization and, in return, discussions around the strategic people vision of the company. Business development leaders may need to consider “recruiter” as an additional hat they wear at their organizations. They are the ones who see market-driving leaders every day and have the best seat in the house to identify jump-skill-level talent when it’s needed.
A second group of critical decision makers who can and do impact the succession planning process are those who manage the talent leading the company’s most strategic priorities. These efforts are usually global, complex, multi-year efforts led by the most knowledgeable, experienced staff and subject-matter experts. The individuals tapped for their ability to lead people are well-versed in the company’s culture, have institutional knowledge, and likely have a desire to advance in the ranks. Leading life sciences companies invest a significant amount of time and money managing their future product portfolios, investing in customer-centric digital technology and paying close attention to the ever-changing regulatory environment. They should expect to spend equally as much time developing, selecting and maintaining a plan for these future leaders. If not, they are at risk of losing their best talent in an environment where burnout is high. Experience leading long-term projects is a resume builder, and these candidates are prime targets for competitors and large consulting firms. If you don’t manage their future, someone else will.
Succession planning for this internal talent pool is critical. These highly sought-after resources tend to cut their teeth on strategic, skill-building projects. Given the volatility and high levels of stress over long periods of time while working on strategic projects and programs, companies must consider the long game. Team members and subject-matter experts may get pulled on to different projects – or may depart of their own volition. Either way, a lost resource can cause timelines and deliverables to slip and projects to run over budget. It can also result in losses in terms of knowledge and experience. Hence the need for active succession planning at all levels of the organization. As an example, if a medical device company employs anyone in their organization with the magic key to any one system or database or perhaps is the keeper of the data tables for multiple integrated systems – someone better be planning for that employee’s departure and begin cross-training possible replacements. Otherwise, few options may exist beyond a consultant who will charge an “expert fee” for that type of specialty.
HR teams are certainly the most qualified to lead succession planning efforts for any organization. However, by building a cross-functional team to drive a succession plan, organizations will be far more prepared when key resources retire or depart due to project fatigue or a better opportunity, creating vacancies in hard-to-fill positions. HR is not the only group responsible; all business leaders should be involved in such pivotal planning.
A few guidelines to consider:
Organizations that recognize and embrace the importance of succession planning on an enterprise scale are well on their way to preserving time, resources, and institutional knowledge – enabling their future success and bottom line – and, in many cases, that of their clients as well.
Joy Taylor is Principal and Growth Solution Leader, and Kim Lehman, is Manager, Business Consulting at Grant Thornton LLP.