Bench strength

Most large companies don't have succession plans, and even those that do don't plan as deeply through levels of staff as they should. "Companies focus on hiring processes, getting people, ratcheting up and down," says Jason Richardson, president of Cutting Edge Information Inc., a research firm in Durham, N.C., that studied succession plans in 42 companies, most in the Fortune 500. This focus is wrong, he adds. "If you're shifting people in and out without a plan, you won't maintain performance, and you won't get better."

Succession planning is even more important -- and less common -- in IT, where success hinges on a broad range of hard-to-find skills, from technical expertise to business andtechnical analysis abilities.

"This is a pipeline for our future," says Margaret Schweer, director of human resources for IT at Kraft Foods Inc. in Northfield, Ill. "It pervades everything we do: how I staff my organization, feedback, guidance, opportunities. It's everything."

After year-end reviews, Kraft begins the succession-planning cycle, which it calls "advancement planning," with management meetings covering junior to executive levels. At each level, managers examine selection processes, feedback, development plans and skills gaps and then select the likely candidates for advancement and determine appropriate development activities. The process builds upward, culminating in a snapshot of IT for the CIO.

The difference between companies that do IT succession planning, like Kraft, and those that don't is their understanding of its value. Preparing for long-term IT succession planning means sharpening a company's in-house skills portfolio by focusing on the career development of key employees. It buffers the IT group against the anticipated exodus of talent caused by baby boomers beginning to retire and workers searching for greener pastures as the economy improves. Succession planning can help integrate recruitment and retention efforts, career planning, development, forecasting and performance appraisal. A good plan will highlight current and future skills gaps and tailor efforts that prepare people to fit those demands. It will point to key people you can't afford to lose and focus retention efforts on them, and it will help you craft performance appraisals to balance the needs of the company with those of the individual.

Because it's future-oriented, succession planning prepares a company for new markets, technologies and business strategies, as well as expansion, contraction and other contingencies. And it goes straight to the bottom line: "If you want the IT organization to do more with less, you have to make sure that execution continues uninterrupted," says Kazim Isfahani, an analyst at Robert Frances Group Inc., a human capital consulting firm in Westport, Conn.

IT succession planning looks at the whole organization, not just the top.

"It's not so much the level of the person; it's the criticality of the function to the business," explains Linda Pittenger, CEO of People3, a human resources consulting firm in Bridgewater, N.J. "Traditional succession planning looks at the CIO, but I say, ëWho's your DBA that you can't lose?' "IT succession planning attempts to match business/IT strategy with the career aspirations of IT staff. It's an ongoing goal. "You're going to have a constant process, not a one-time deal," Pittenger says.

Succession planning also focuses on the future. As a result, changes in strategy must always be top of mind. For example, if three database administrators are handling your Oracle Financials, but an impending acquisition is going to add significant work in that area, you may need additional Oracle talent. Conversely, if an impending outsourcing will leave certain areas overstaffed, you can begin to plan for more efficient use of those people.

A Partnership

Ideally, succession planning is a partnership between human resources and IT. "The process -- the how -- should be owned by HR, but the work should be done by the IT leader in conjunction with HR," says Pittenger.

But the process has to be embraced throughout the organization. "Multiple levels of management have to own it," Schweer says. And the plan has to be integrated into IT daily. "If you're doing it right, everybody is involved," she explains. "We're all doing it at a lot of different levels, but we're all looking at similar things: What are we doing to develop talent? How is our depth? What will we do next year to improve?"

Schweer says Kraft's proprietary software for performance management is the cornerstone for all related activities. "Whatever it is you call that kind of tool, that's the vehicle you use for starting the conversation," she says.

Pittenger adds that special software isn't necessary. "If you have good career development tools and a good skills inventory, you can do this on a spreadsheet," she says. The biggest challenge in IT succession planning seems to be getting it on the agenda. "A lot of companies don't do this at all; they live in a panic state," she says.

The other hurdle is agreeing that this isn't a one-shot exercise. "You don't create a healthy organization in a single year," Schweer says. "And if you only think about it once a year, you've missed the point."

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