(Editor’s note: Jeff Diana is the Chief People Officer at SuccessFactors. He submitted this story to VentureBeat.)
Top leadership turnover and shake-ups have been all over the news lately, affecting everyone from AMD to Google to Apple to HP. The turbulence in the big business world underscores the need for companies of all sizes to look at their strategy and planning for leadership roles – and beyond.A small staff doesn’t get you off the hook. In fact, it only magnifies the immediate impact of unexpected changes in your team – and the need for thoughtful planning.
There are many differences between a company with 10 employees and one with 10,000, but making sure you always have the right people in the right roles is crucial no matter what your size.
Successful tech startups tend to experience growth spurts as products gain market traction and capital is added. With fast growth, company needs change rapidly – and there’s a natural tendency toward turnover, as your staff experiences changes in culture, roles and work priorities.
Any disruption to your workforce is going to have an associated cost. Sure, it’s easy to imagine the impact of a key leader leaving the company unexpectedly, but what about the person who knows your reporting systems inside and out? Roles outside of the C-suite can often have even more sudden impact on your organization’s performance. Why? These individuals often play critical roles in day-to-day execution with specialized, undocumented knowledge stored only in their heads.
Think about the person who handles your core IT systems and supports your customer tracking technology, or your financial planning person who built the assumption model for cash flow expectations for the coming year. These roles exist everywhere from accounting to HR. If an individual has a unique role with specialized knowledge and a high volume of meaningful transactions, it’s a good bet your organization would instantly feel a real performance impact if they bowed out without warning.
Ultimately, companies should plan for both succession and short-term coverage for every role to keep things running smoothly. So where should you start?
Focus initially on the critical roles that have a clear tie to wealth-generation. These positions may be customer facing but they may also be a critical support function to those who work directly with your customers.
At General Electric, we called these “Pillar Roles.” You may have heard of these as “A” positions as well. The roles that fit this profile will be unique to your business model and your industry. It’s valuable enough to simply determine what those roles are – and make sure you have your top talent in them. Often companies find they do not and need to make some changes.
The planning for possible attrition in Pillar Roles follows the same blueprint as for all positions:
- Do we have someone internally who can do this job today?
- Is there someone not quite ready who we can grow and stretch into this role?
- If not, can we buy some outside help (contractors, consultants, etc.)?
- Do we need to have an eye to the external market so we have a clear line of sight to candidates who would be successful?
When it comes to succession planning, there are a few basic rules of thumb. Keep them in mind as you begin planning for your company’s future:
Prioritize – Companies that value their people are rarely caught off guard by unexpected changes in their workforce. They tend to have a steady rhythm around people movement with sincere CEO and executive engagement.
Analyze – Succession is important for the entire company but the greatest focus is in key wealth-generating roles. Identify the roles with the greatest impact on customers, products and systems.
Assess – Determine the performance of your people to get your arms around the talent that already exists at your company. Then add an experience profile so it’s possible to identify what talent needs to be cultivated in senior levels. Pepsi is a fantastic example of an organization that does this really well.
Advanced moves - As your company grows and your workforce becomes larger and more varied, the planning you put toward your investment in people should be equally sophisticated and mature. At some point you will want to combine talent assessments with retention assessments, build succession tracks and measure progress to see what your company’s human capital really looks like.