A STUDY OF SUCCESSION PLANNING CHALLENGES IN GOVERNMENTAL ORGANIZATIONS

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1 A STUDY OF SUCCESSION PLANNING CHALLENGES IN GOVERNMENTAL ORGANIZATIONS Dr.Sayed Akbar Nilipour Tabatabaee 1, Azam Abdollahi Lakeh 2, Alireza Abbasi Tadi 3 1 Faculty Member of Research Institute of Shakhes Pajouh, Isfahan, Iran 2 Ph.D. student of Human Resource Management, Research Institute of Shakhes Pajouh, Iran 2 Ph.D. student of Entrepreneurship, Research Institute of Shakhes Pajouh, Isfahan, Iran Abstract Recruiting competent and talented employees is now a major challenge for governmental organizations in Iran. Although succession planning appears easy to implement in theory, there are multiple problems in practice. We focus on the reasons of this problem. This study aims to address some of the challenges in succession planning through a review of literature and expert interviews. The statistical population for this descriptive survey includes management professors at the University of Isfahan as well as Human Resources (HR) managers at the Isfahan Fire Department, Ministry of Education, Keshavarzi Bank, Saderat Bank, and the International Pardis Faculty of the University of Isfahan. An open questionnaire was completed by 10 professors of management along with 30 HR managers in governmental organizations. This study presents a conceptual model of the challenges and problems in succession planning. Suggestions for solving such problems are offered in the conclusion section of the article. Keywords: succession planning, talent management, governmental organizations Introduction Over the past 50 years, the world has undergone many social, cultural, economic, and industrial changes, which have made current organizational structures barely similar to the ones of the past. Organizations which make use of their available and potential resources to face existing challenges own the future. Developed organizations are the prerequisites to a developed society;their real power stems from their human resources, as their strategic capital. Thus, we need to examine this important and valuable resource. Under such circumstances, implementing succession planning appears to be an initiative which can bring about fundamental change based on vision and insight. This requiresthe presence of various preparatory factors (Wilcox, 2002). Succession planning is considered a difficult endeavor for three reasons: (1) different Human Resources (HR) sectors are not independent of each other; these sectors, working in concert to support line activities, face more challenges in executing strategic plans since they can be managed by a single manager. Long-term and optimized succession planning is a strategic process which involves executing a long-term plan. (2) Succession planning needs time and resources, which many managers don t have at their disposal. (3) Succession planning may not 231

2 be equally desired in different countries. This is because the workforce in some countries may appear to remain constant and governments feel that they won t have to face the retirement crisis in the near future (The International Personnel Management Association-Human Resources, 2004). Therefore, the present study aims to review and classify the problems associated with succession planning. Research Background Defining Succession Planning Succession planning is defined as a structured approach to create consistent and continuous leadership in the organization (Wilcox, 2002). It refers to the transition of ownership of the organization, which may be due to the previous owner s desire to retire, quit, etc. Here,succession may involve the transition of the management position to a family member, an employee, or a buyer outside the organization (Martin et al., 2008). Succession planning is not a stealthy and hidden strategy for replacing individuals in certain positions in a short time. It is an organized process through which professional and personal improvements are aligned with organizational strategies, in order to ensure that suitable individuals with the right attitudes and skills are available to fill empty positions at the right time (Carroll, 2004). Succession planning can be defined as an attempt to determine the number of qualified managers and skilled employees necessary to cover events such as retirement, death, disease, and promotion. This definition includes the organization s potential and the management s strategies (Sambrook, 2005). It is a purposeful program for preparing the organization to fill unoccupied positions (Nuttal et al., 2007). Succession planning is a strategic, organized, and predictable attempt to improve potential leaders capabilities through experience, such as deliberate job rotations and training with the goal of higher positions in the organization being filled without discrimination (Barton and Rouse Jones, 2007). Succession planning is a program in which one or multiple potential successors are selected for key positions; these individuals develop their careers and receive enhancements (Hirsch, 2008). This process is designed to ensure continuous and effective performance in the organization through using and improving employees and managers in key roles (Weathers Groups, 2008). Succession planning is a subfield of workforce planning in which key positions in the organization are determined and employees become prepared for filling them. This involves identifying the gap between the current workforce and the one necessary for the future (Mckinney and White, 2009). Succession planning refers to the process in which potential talent for filling key positions, in the future, is identified and prepared through planned training and education (Abualaei, and Ghafari, 2007). The succession plan can be considered as an attempt to plan for the quantity and quality of managers and employees in order to cover events such as death, retirement, disease, promotion, or any other circumstances which may impact the organization s long-term plans. Furthermore, this plan is one of HR s plans with the most emphasis on identifying talented employees (Khanghaei, 2011). Organizational succession planning provides a comprehensive plan for regularly training the future generation of employees and managers (Fishkind and Kautz, 2012). Organizational succession planning involves transferring the ownership of the organization to another individual for various reasons such as the owner s desire to retire (Martin, 2012). As pointed out by Drucker, talent identification and succession planning programs are based on the following principles (Eydi and Dianati, 2008): 1- Managers are not born; they should be trained. 232

3 2- The training process needs to focus on the major skills and capabilities necessary for the future world of business. 3- Talent identification and succession planning need to be systematic. 4- Top managers in the organization need to fully support the program and be its main customers. The main dimensions of a succession planning system are the following (Hills, 2013): 1- Organization s strategy, which is at the heart of a succession planning organization. Succession planning is simultaneously associated with HR and the organizations strategic direction, and joins the two fields. This role makes succession planning a critical component for achieving future goals of the organization as per its strategies. 2- Supporters who play a key role in both the success and the adoption of the system. Support of succession planning systems must be focused in the highest level of the organization. However, this support for the system is not one-sided i.e. succession planning systems provide support for the organization by training competent managers. 3- Talent identification and creating a talent pool involves identifying individuals with potential. The evaluations in these systems are directly based on performance, potential, and a set of desirable management and organizational capabilities. 4- Training potential candidates. Talent management is one of the most-widely used concepts in succession planning. It is defined as investing in employee development, identifying potential successors, and preparing them for various leadership roles. Talent management composed of talent design and development is a relatively novel concept, emerging in HR literature in the 2000s. This concept originates from the term War for Talent in the late 1990s, which was a metaphor to demonstrate the difficulties companies faced in recruiting and retaining talented employees. Talent management refers to facilitating and developing talented individuals careers using organizational guidelines, resources, policies and processes (Guy et al., 2009). Succession crisis in governmental organizations Currently, most succession plans for managerial positions in the organization are informal and planning is almost non-existent. Succession planning is only considered when key positions remain empty. Thus, succession planning is mostly done on the basis of high performance (if identified and evaluated). Moreover, in some organizations, HR experts avoid succession planning due to claims that the organization is not based on competence (Green, 2000). Zeis (2014) believes that if organizations ignore succession planning and training top HR managers, their plans will be futile. The challenges in this area can be divided into two groups: 1- Technology challenges 2- Process challenges In the seminar by the Center for Governmental Strategy and Management in New York City, Cheng pointed out that governmental organizations do not possess appropriate succession planning programs. A national survey of executive managers in governments in 2006 asked whether they had any plans for succession. The results showed that 60 percent had absolutely no plans. This proves that governmental organizations are not ready for change in near-future (Report on Perspectives on Executive Succession Nonprofit Organizations, 2008). 233

4 Chart 1. Challenges in succession planning (Beheshtifar, 2012) After a review of literature and interviews with experts in the field, the following model is presented for challenges in succession planning in governmental organizations. 234

5 o Management s fear of succession planning due to the possibility of change o Lack of scientific HR management o Managers being changed regularly, lack of responsibility by the manager o Lack of skills, information, and awareness by the manager o Incompetent manager Managerial factors o Lack of succession planning culture o Ignoring talent in the organization o Inappropriate organizational cultural o Fear of succession planning, not believing in successors in the organization o Political figures being overinvolved in positionassignments o Rules and regulations Cultural o Lack of formal succession planning in the governmental factors sector o Lack of training opportunities o Lack of strategic planning in the country Legal factors o Lack of time and resources o Lack of management system o Lack of skilled managers Costs factors Educational factors Challenges in succession planning Organizational factors Figure 1. Proposed model for succession planning 235

6 Methods In this study, an initial review of literature was conducted and some challenges in succession planning were identified. Others were identified after interviewing a group of managers in governmental organizations. The statistical population for this descriptive survey includes management professors at the University of Isfahan as well as Human Resources (HR) managers at the Isfahan Fire Department, Ministry of Education, Keshavarzi Bank, Saderat Bank, and the International Pardis Faculty of the University of Isfahan. Due to restricted access to managers at such level, we had to use random sampling. Finally, an open questionnaire was completed by 10 professors of management along with 30 HR managers in governmental organizations. Demographic variables Descriptive statistics for demographic variables including frequency and frequency percent are shown in Table 1. Table 1. Descriptive statistics Variable Level Frequency Frequency percent Gender Male Female 6 15 Education High school diploma/ 0 0 Associate s degree Bachelor s Degree 0 0 Master s Degree PhD Position Professor Manager Experience 1-5 years years years years years years Concluding Remarks Succession planning is a form of HR planning which is aligned with the organization s strategies. It is unavoidable in modern organizations and, if implemented in an atmosphere filled with trust and respect, increases effectiveness. Our results are consistent with those of Osmorian (2004), Beheshtifar (2012), Hadizadeh (2012), Carrol (2004), Davis (2005), Barton (2007), Bigliardi and Dormio (2009), and Hampel et al. (2010). This study considered the challenges of succession planning in governmental organizations in Iran. The identified challenges were divided into six categories: managerial, organizational, cultural, legal, educational, and costs. Since most organizations in Iran have not implemented succession planning we must rely on other studies in the future to further identify the aspects of this endeavor. Based on the results, we provide the following suggestions: 236

7 Managers need to support succession planning programs in the organization and allocate enough resources. Managers in governmental organizations, especially HR managers must consider succession planning as part of their responsibilities. Investments in training future managers as well as designing and implementing strategic improvement systems are of grave importance. Talent management culture needs to be considered in organizations. Employees must be recruited and promoted only on the basis of their competence and skills. In addition to focusing on the organizational constraints and facilitators of succession planning, future researchers can study effective succession planning and propose capability models for Iranian managers. References Abualaei B., Ghafari A., (2007), Future Managers: Theory and Practice in Talent Management and Succession Planning, Industrial Management Publications, 3ed., p.95 Eydi A., Dianati M., (2008), Tadbir Magazine, Issue 195, July 2008 Sims D., Gay M., (2007), Building Tomorrow's Talent: A Practitioner's Guide to Talent Management and Succession Planning, Translated by Jozei N., Saramad Publications, 1ed. Wolf R.L., (2009), Systematic Succession Planning, Translated by Khaghaei G., Nasl-e-no Publication, 2ed. Barton, Karen V.&Rouse Jones, Margaret(2007), Leadership and Succession Planning in Caribbean Libraries, Workshop on Trends and Development in Caribbean Librates, June 25-29,PP.4,5. Beaver,G.and Hutchings,K. (2012), The big business of strategic HRM in SMEs, in Stewart,HRD in Small Organisations,Routledge Research Studies in HRD Series,Routledge, London,P.81. Carroll, C.(2004), Succession planning: Develping leaders for the future of the organization, Leadership Abstracts, Vol. 17 No.2P.2. Green,Marnie E. (2000), Beware and Prepare:The Government Workforce of the Future, Publice Personnel Management, Vol.29 NO.4P.435. Harris, Lauren S. and Kuhnert,Karl W. (2008), Looking through the Lens of Leadership: A Constructive Developmental Aapproach, Leadership & Organization Development Journal, Vol. 29 NO. 1 P.51. Hills, Angela(2009), Succession Planning or Smart Talent management?,journal of Industrial and Commercial Training, Vol.41 No.1P.4. Hirsh, W. (2008), Succession Planning: Preparing for the Future, Presentation to Derby City Council, January. International Institute for Managment Association for Human Resource (IPMA) (2004), Workforce Planning not a common practice, IPMA HR study find, International Public Managment Association for Human Resource. At Martin, Paul Derek & Pope, John (2008), Competency based interviewing has it gone too far?, Industrial and Commertial Treining, Vol. 40 No. 2P.81. Nuttall, Ingrid, Falkner, Tina & Roberts,Vickie (2007), Succession planning: Whatever you call it, do it,aacrao, Marach2, Boston, Massachusetts, P

8 Report on Perspectives on Executive Succession Nonprofit Organizations (2008), A Nonprofit Seminar Sponsored by the Center for Nonprofit Strategy and Management, School of Public Affairs, Baruch College, City University of New York, March 19. Sambrook, Sally (2005), Critical HRD: A Concept Analiysis, Personal Review, Vol.38 No.1P.580. Weathers Group (2008), Creating Tomorrow s Leaders Tody: A Lesson in Succession Planning,Nonprofit C ongress & National Meeting, Jun,2 Washington D.C.P 1,www. weathers group.com. Wilcox,Jeffrey R.(2002), Creatinuy of Leadershipe, T he ExecutiveConsulting Family of InterimManagement and Transition ServicesCompanies Long Beach California, P. 1, Zeiss,T. (2004), A new wake up call for community colleges, Leadership Abstracts,Vol. 17 No.9. Martin, Sonia San(2012), Relational and economic antecedents of organizational commitment, Personnel Review,Vol.37 No.6 P.590. Fishkind,Russell J.& Kautz, Robert C. (2012), Estate and Business Succession Planning, john Wiley & Sons, Inc. New York, P

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