Dynamic succession planning capabilities enable organizations to focus less on filling position vacancies and more on “architecting” a mix of complementary high potentials who can be combined and deployed to address evolving strategic priorities.
A study by Ormonde Cragun of the University of Minnesota Duluth and Michael Ulrich of Utah State University applies the principles of “Dynamic Capabilities” to succession planning to create a blueprint for strategy-driven human resources management.
Succession planning is the coordinated effort of organizations to avoid disruptions when key people leave by developing potential candidates within the organizations to fill vacant strategic positions. Traditional or what the researchers call “ordinary” succession planning is a step-by-step process based on forecasting workforce supply and demand: the organization determines talent gaps in the organization, selects individuals with the potential to fill those gaps, and develops their capabilities to meet the organization’s future needs.
Ordinary succession planning can fail to meet an organization’s needs in several ways. For example, ordinary succession planning emphasizes operational stability while today’s competitive environment requires organizations to be flexible and agile in responding to rapidly shifting strategies which may involve rapidly shifting human resources requirements. Ordinary succession planning also measures success by the number of highly qualified candidates it produces. In today’s complex business environment, success depends on developing a unique combination of qualified individuals who together form the organization’s strategic human capital resources (SHCR).
The principle of dynamic capabilities responds to the modern needs of succession planning. Dynamic capabilities consist of firm and strategic routines that allow the organization to reconfigure existing resources, or acquire new resources while releasing resources that are obsolete, in order to seize opportunities and create competitive advantages.
Dynamic Succession Planning Capabilities (DSPC) consists of three sets of routines that contrast with the routines of ordinary succession planning:
While the goal of forecasting in ordinary succession planning is to minimize disruption and ensure stability, the goal of environmental scanning is to sense and seize market opportunities. No longer is the organization simply looking to fill talent gaps; instead, it scans the environment looking for superior information about the business environment. Demographics, labor market, and employee preference trends that could create competitive opportunities for the future are also taken into account. Succession planners must also segment individual knowledge, skills, and capabilities, determining which skills and capabilities available in the labor market could give the organization a competitive advantage. Finally, environmental scanning includes mining networks for information.
The familiar traditional approaches to human resources development include mentoring, training, and job rotation to help an individual develop competencies and social capital. Dynamic succession planning is based on strategically designed development plans in which the strategic and competitive priorities of the organization are paired with the individuals’ knowledge, skills, capabilities, prior experience, and career goals. The organization also seeks to “architect” the complementarities of the individuals in the organization that is, to ensure that the right mix of individuals can synergistically interact and interrelate to produce the best outcomes for the organization. Strengthening the social ties and trust among these individuals is key. Finally, constructing a strategic human capital resources supply chain takes a broader approach from simply interviewing individuals to selecting the most capable and best-fitting candidates for potential value positions down the road. A significant drawback of traditional selection is the focus on the individual position rather than the organization’s collective human capital needs. In contrast, the dynamic capabilities approach uses the metaphor of supply chains to conceptualize the vibrant maintenance of human capital “stock and flows” through internal and external pipelines (fed in part by effective employer branding). The human resources talent chosen and deployed through the supply chain process form the human capital pools that will support the firm’s evolving strategies.
Executive leaders play a vital role in the implementation of the dynamic succession planning capabilities (DSPC) routines and processes in their organizations. (Executive leadership is not restricted to the CEO but also includes the top management team, responsible for putting in place succession planning routines throughout the organization.) The DSPC approach requires executives to understand their strategic human capital resources needs: the human capital pools that will best advance their company’s competitive strategies. At the same time, executives need to be aware of dynamic succession planning routines, such as environment scanning or constructing the human capital supply. Without this awareness, they will fail to create an organization-wide succession planning infrastructure that successfully addresses their strategic human capital resources needs.
Ormonde Cragun’s profile at University of Minnesota Duluth
https://lsbe.d.umn.edu/faculty-staff/ormonde-cragun-phd
Michael Ulrich’s profile at Utah State University
https://huntsman.usu.edu/directory/ulrich-mike
Dynamic Succession Planning Theory: A Dynamic Capabilities Perspective of Succession Planning. Ormonde R. Cragun and Michael D. Ulrich. SSRN No. 4754278 (March 10, 2024).
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