Responsibilities in all companies are always at risk of unexpected personnel changes. Illnesses/injuries, resignations, etc., and some planned ones such as promotions.
I used to work in a multi-national company that kept a very healthy succession plan. Every key position was identified, replacements were identified, training, job rotation, procedures, alignment with career plans were complete. The first time I heard about that plan I was impressed on how focused they were on preventing interruptions in the chain of command.
This process required some slack in the number of people working in the company. No position was superfluous, but some of the positions – not all – were utilized to about 80%-85% of their time, which allowed for easy management of sick time, vacations, etc.
Operation plans were defined and clearly stated with quarterly progress for clear and easy understanding metrics and comments where required. If a key position had to be replaced on quick notice it would take a few days to a predefined replacement appropriately trained and aware of existing procedures to delegate his/her own position to the next in line.
I had the opportunity to see this replacement process in operation a couple of times always effectively transitioned with no suffering to the company.
Many years later I worked for the local unit of a medium size corporation. This local unit operated a process with minimal profit margin on each product. Cost management is critical for this company. All positions had full or overloaded workloads.
In this environment there were no succession plans, investment in training and education was minimum. They did have clear stated goals for each area and periodic reports. Because of the changing nature of the business though, not many performance metrics had long term goals. Most of those long-term goals were related to cost control and staying above certain profit margin.
Replacement of key positions in this company were slow, affected the operation for a time, caused a noticeable amount of overwork for all the parties involved and required re-balancing of duties and responsibilities according to skills and previous responsibilities of the person moved to the required position. Frequently changing personnel caused a redesign of the position and procedural changes.
These work overloads impacted not just in people working long hours, but they also stopped executing some of their responsibilities. Typically, execution was prioritized, but control activities were not performed diligently until the operation went back to a steady process.
It was the price this company payed for maintaining the operation under their required cost conditions.
Lessons learned
Based on these and other experiences on company’s succession plans I have drawn these conclusions:
- Companies must identify their risk-tolerance/risk-avoidance levels. There is not a one-size-fits-all approach.
- The amount of effort in risk mitigation depends on the importance of an activity for the corporation. Plans for mitigating risk can be extensive and take resources to enable.
- The alternative to mitigating or avoiding risk is accepting it.
- Accepting risk instead of mitigating it will affect the operation and the personal lives of people involved. Mitigation plans make a much better work environment.
BIO:
Victor Granados, CC, CPIM, CSCP
President of the Ventura County Chapter of APICS
APICS IDP Master instructor for Operations Management (CPIM) and Associate Instructor for Supply Chain Management (CSCP) certifications
Sole Proprietor of Granados Systems & Processes Consulting
Victor Granados, CC, CPIM, CSCP
President
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