Rolanda: Welcome to the HR Bitesize podcast series and conversation with Clarendon Executive. Clarendon Executive works with companies across Northern Ireland to help maximise their leadership capabilities across all aspects of the employment lifecycle from executive search through to organisational and staff development. Clarendon's expertise spans the private, public, and third sectors. The firm focuses on identifying talented board and senior executive level across the management disciplines. This includes, for example, general management, commercial marketing, digital and operational effectiveness, and leadership roles such as operations, finance, risk compliance, technology, and human resources.

Today, we are joined by Hugh McPoland and Mairéad Regan, associate consultants at Clarendon Executive. Hugh has a considerable track record in organisational change along with substantial knowledge and experience in assessing the leadership credentials of directors across the public sector. Mairéad specialises in post-hire executive development and senior executive performance and progression. Previously Group HR Director at UTV Media PLC, Mairéad has more than 25 years' experience in human resources at a senior level.

This podcast is a must-have listen for any HR manager or director, covering hot topics such as flexible working, menopause in the workplace, dealing with challenging behaviours, etc. Our easy-to-digest format makes these short but informative podcasts perfect for listening to at leisure in the car or during your lunch break.

We're going to start talking now about succession planning. Earlier this year, Joanne McAuley from Clarendon Executive discussed the concept of succession planning in an article she did for Legal-Island. She suggested that this is an area that we're not particularly well-versed in in Northern Ireland, particularly in smaller, family-owned businesses.

Defining Succession Planning

So before we discuss this in more detail, can you define what is meant by the term "succession planning"?

Mairéad: Really, it is a business looking at itself here and now but primarily into the future to ensure they're fit for purpose and to have the individuals in place with the skills and the experience to meet the future demands. So it's looking at the strategy and the vision for the business, where it's going, and it's about mitigating any risk in terms of if someone was to leave, either planned through retirement or unplanned, that there are individuals or a pool of individuals in place who can step up and fill that gap.

It's to ensure that an organisation doesn't regret a hasty recruitment decision that's made because somebody leaves and they didn't foresee that happening. They have to appoint because they don't have the skills in-house, and they appoint someone who perhaps it's a costly decision because it doesn't work out.

It's looking at any potential gaps in terms of individuals leaving, looking at the skills gaps, and ensuring that the individuals within the organisation get training or development and support to address those skills that in the event that somebody moves on either, as I say, of their own choosing or the choosing of the organisation, that there isn't a vulnerability for the organisation that they have no one to step into that role.

Hugh: Yeah, I think that's absolutely right. My concern sometimes with succession planning, when I talk to people about succession planning, they have a fear that it's about trying to predict who the next chief executive will be, and that's not what it's about because there are things called equality laws around which need to be adhered to.

I think it is about organisations, with varying degrees of sophistication, just trying to ensure that . . . it's not necessarily about people, but it's about the skills. It's ensuring that you have the skills that you need for the future. It may well be – I mean I come from a public-sector background where we can invest lots of money in training and development. It's about looking in terms of saying, "Well, what are the skills we need for the future?" And they keep changing.

I remember in 2000, just the new millennium, I was always told in terms of future managers they will have to have collaborative working skills. They're not in great evidence at the moment around the public sector. I think that we're still having that conversation on how you develop collaborative working skills across an organisation, particularly where there are high levels of performance management. It's about me. It's about my - competence interviews.

I think organisations at a very high level – and I would focus on the public sector at board level – should be looking in terms of ensuring that the 2^nd, 3^rd, and potentially the 4^th tiers for a 10-or-15-year horizon are actually being exposed to a wide range of experiences, training, and learning in whatever format that suits them best to enable them to develop the skills so that they can actually put themselves forward for selection when future posts, a director or any executive level, come forward. I think it's really important.

In many ways, to leave it to chance and a recruitment process isn't going to work for very much longer. Whilst you may have a labour market in the last five years which is actually quite buoyant. Whatever happens at the end of October, we may find significant numbers of people moving around. The labour market may become more difficult, and we actually need to start planning our successions in the future. That's where comes it through. So for me, it's very high level and not necessarily focused on individual people but focused on ensuring that the right skills for the future are actually being developed within the organisation so that people can step up potentially within.

It also strikes me sometimes that that's fine if you're a large organisation, but for a small or medium enterprise, that isn't going to work. It may well be that the local chamber of commerce, the local council, and their economic development units may need to think about how they actually develop those skills for that particular area.

Mairéad: I think it's really important to say it's succession planning, not a succession plan, because I think people think, "Well, we'll do this exercise. We'll identify a talent pool and a number of individuals, and that's it done." But this is actually a dynamic process. It's succession planning, so it's ensuring that an organisation will continue to look at . . . because the needs of the business will change. As Hugh says, coming up to the end of October and the changes in Brexit and all the rest, there are events and there are things that happen. This is a dynamic document or a dynamic process that needs to be looked at on a regular basis because things change. Demands change. Businesses need to be flexible, so the succession planning needs to be flexible as well.

Identifying Future Skills

Hugh: can I ask you Mairéad. - for me, I think what's more difficult is for organisations to identify what the future skills are. We tend to develop our training and development and our executive leadership programmes on the basis of what's current thinking in leadership. In fact, we're really not quite sure what the future skills might be.

Just reading some of the stuff around today, I notice that there's a lot of organisations – BT is one example and a couple of Health Service trusts in England – are now looking, taking some of the neural science to look at how people learn to actually think about what the skills are for the future. That may not be the normal leadership styles that we think about, depending on the sector, but I think the sense is that the great heroic leader of the past is no longer required in the future. What are the real skills that people need to learn for the future?

I'm just wondering if you had any insights in terms of how the private sector might do it?

Mairéad: Well, you're right. Traditional skills are still important, and technical skills obviously are incredibly important, but we do see changes in terms of it's all into software development and artificial intelligence. All of that is changing, and it's changing dramatically, and there is an onus on the business. I think businesses can get very focused on the operational day-to-day responsibilities, but there has to be the head up. You mentioned a number of organisations there. There is an opportunity to look at what is required beyond that. The softer skills now, they always were important, but they're even more important. As you talked about, the networking, the collaboration, looking at what's happening in other industries and not necessarily just your own sector, all of that is so critically important, and the speed of that change is just phenomenal.

Hugh: I think it's really difficult for people to develop a real succession plan. First of all, the key thing for a HR director or a HR manager in an organisation is actually to get the horizons lifted, the eyes lifted away from, "What's the P&L say? Are we making a profit? Are we going to be okay for this financial year?" But to get a board and directors to think about, "Where are we getting the skills? How are we ensuring that the skills for the future are in the organisation?" That conversation is what those future skills might look like and how we develop them.

As I say, I come from the public sector. We have lots of training and development organisations we can plug into. SMEs, I'm not sure how they actually do that. Maybe something like the chamber of commerce needs to think about that or even the local councils or education or economic development units. I think it's a real task for SMEs. It's easier for large organisations and large corporates, but for small organisations, I think it's quite difficult.

Mairéad: That's why you need to build up your networks and your contacts. We talked in a previous podcast about getting outside of your organisation and that you now need to look much broader than that. It's a balance between your competitors and how much you're prepared to share with competitors, but if you go to networking events where it's not just your own sector, then you're getting insight into other issues, other challenges, other opportunities, and that widens your knowledge.

Rolanda: Given that we are all living longer and, thanks to the extension of the state pension age, we're all going to work longer, succession planning would have always been sort of based on the fact that there had been a production line of movement of people. So how does succession planning work in a more modern workplace where people are staying and working longer? How does an employer facilitate that?

Hugh: Again, that goes back to what succession planning is. It's not necessarily about the replacement of people. It's about the development of the skills that are required for the future. Yes, ultimately, a chief executive or a director of finance or an executive will leave, and you want to have a pool of people to actually be available to move forward.

I think the point you raised about people working longer is as much an impact on career development paths for people where, again, in terms of succession planning, a very sophisticated approach to succession planning will start to think about, "If we have two or three people at tier two or three, how do you develop those skills?" They may work in the finance department now, but there may not be an opportunity for them to be a director of finance for 10 or 15 years, but their skills are valuable. You then start having conversations about how they might move across organisations to develop skills which can contribute at board level.

So I think it's not just about that singular channel about replacing Jimmy or Jane, who's going to retire at 60 or 65. But it's about making sure the organisation has the skills and the people who are in it who have the potential have the opportunity to develop new career paths, not just the one they're still in at the moment.

Flexible Working and Succession Planning

Mairéad: This links very clearly to one of the other podcasts that we've done on flexible working in that if individuals are choosing to stay longer, they may request flexible working. If an organisation is prepared to consider that because it suits the individual's lifestyle, there's an opportunity for someone to learn the skills and develop without having to step into the role immediately. It is a career development opportunity for someone lower down in the organisation. It's a win-win because the organisation won't lose the skills, experience, and knowledge of that individual who typically would have left as soon as they hit what was the traditional retirement age, but it does give an opportunity for other individuals to partially step up and to learn those skills and experience.

You have to balance that with the frustration and the, "I would have thought I would have progressed earlier in the business, but whoever it is at the senior level has stayed on." That's, as you say, where you start to look at, "Well, are there other opportunities within the business? Is there a sideways move? Is there some working group? Is there some other addition that will continue to motivate and engage the individual so that they stay in the business until that opportunity is totally available to them?"

Equal Opportunities and Succession Planning

Rolanda: I wonder if one of the reasons we're not seen as being particularly good at it in Northern Ireland is because of equal opportunities. I don't mean that in a negative way, but there's always this sort of thing where you have a position that needs to be advertised externally. I just wonder how does succession planning fit in and ensure that it provides equal opportunity to all?

Mairéad: As we mentioned at the start, I think it's ensuring that when you look at succession planning, you're looking at a pool of individuals. You're not identifying one person who's from a certain community background or gender or whatever. It is an opportunity that's provided to a range of people, and the skills and development and experience are provided to those. Now, that certainly will bring cost implications for smaller businesses, but to ensure that we are being genuinely fair and genuinely equal in the opportunity that's being provided, you need to ensure that there's a pool as opposed to the designated chosen one.

Hugh: I agree with that, but I have a slight issue with that in that if you take that approach . . . I think I'm somewhere in between the two. If you take an approach where everyone can go through this development programme or these developmental experiences, in every organisation there are people that everyone knows are not going to go up the organisation. It's the classic implication of the Peter Principle.

It's an idea and a concept I've struggled with at times because, yes, from an equality perspective, if you run a management development initiative, everyone should be able to participate, but organisations also need to look in terms of return on investment. Some of those development programmes can be £5,000 or £6,000 depending on what sort it is. But there will be people in your organisation from your performance management system you know are not going to go any further.

Is it fair to let them go through that development experience? Is it building on expectations that cannot be realised? Or is it better to say to someone who potentially is in a performance management environment, "We don't think you're going any further in the organisation, and we're not going to invest £4,000 in a management training programme. We will continue to keep your skills up to date, but we're not going to invest that."

I think that's the sort of problem with the interpretation of the equality legislation. If you suddenly find that women, for example, are being deselected from that leadership development, there's an issue. But if you have the evidence from a good performance appraisal system or performance management system – and that's evolving in very different ways these days – that's okay. Sometimes I call it the sheep dip where everyone goes through the same development programmes, and I think that's a wasted investment. I think organisations need to be smarter.

That's why, for me, a large organisation needs to have some oversight with non-exec’s. Is everyone going through an appropriate level of training for their potential? If not, why not? Because you could have someone in a particular year not doing particularly well for a whole host of reasons. You shouldn't lock them out completely, but maybe not this year's investment.

I think there are challenges, and people will perceive that as, "You're blocking me because I am a man, woman, different racial background, or whatever." That's why you need some of the other key HR tools to be able to say, "No. The reason why you've not been through this development process is X, Y, Z," and that needs an honesty as well with the individual from a managerial perspective, which sometimes managers have difficulty doing.

Importance of Performance Management

Rolanda: I guess that just comes back to what you were saying about the skills needed for the future workplace, and one of those is having those difficult conversations.

Mairéad: Absolutely. I think that's another podcast in itself. Performance management has progressed, but you're absolutely right, Hugh, that if the basic building blocks of the HR processes and supporting processes aren't there, then things like succession planning and engagement, etc., etc., will struggle. You need those building blocks.

If you're having those honest and genuine conversations, then whatever training or support the individual is going through, they will know it's tailored to their needs and their requirements, and that message should be delivered in a way that's positive and constructive as opposed to, "We don't see you progressing in the organisation." It's more, "We actually see your strengths are in this, and we want to build your . . ." It's that kind of.

But if those building blocks aren't in place, then you're always going to struggle with succession planning or any of what may be seen as the more attractive bits of HR. You need to get the building blocks right.

Hugh: It's interesting. This conversation starts to link so many bits of HR together, and I think it just demonstrates how integrated HR is. It's not just about succession planning. It's about performance appraisal. It's about engagement. It's about honesty. Ultimately, it's about recruitment as well. That HR function is so integrated. You just can't extract one without having a conversation about another.

Rolanda: Okay. Thank you.

Thank you for listening to the HR Bitesize podcast series and conversation with Clarendon Executive. Further podcasts in this series are available at legal-island.com within the Employment Law Hub. Thank you.

Additional Reading

Making a Success of Succession Planning